Northern Foods is closing two pastry factories with the loss of 1,060 jobs.
The Goodfella's pizza maker has revamped its business
The maker of ready-made meals and Goodfella's pizzas will shut factories at Evesham in Worcestershire and London Road, Carlisle and transfer production.
The move comes as the group faces price pressure from its supermarket clients and follows the loss of 30 senior management jobs earlier this year.
The Usdaw union described the news as devastating and said it would be holding meetings with managers.
Northern Foods, which also makes Dalepak frozen foods and Fox's biscuits, said 100 jobs will be created when it moves the production of quiche and vegetable bakes from Carlisle to Nottingham in 2005.
The Evesham closure will affect about 400 staff making sausage rolls and pies. Another 100 jobs will be created when this work is transferred to Market Drayton, Shropshire.
Sales to Asda, Tesco, and Morrisons, have grown in the last 11 weeks, the company said, but it expects trading conditions to "remain extremely competitive, reflecting continuing retailer pressure and ongoing cost inflation".
The firm said it had been hit by rising energy prices and increases in the cost of various foods.
Northern Foods said it would take a £45m ($81m) one-off charge in the current financial year as it aims to save £10m annually from 2006.
In June, the firm posted a 28.7% fall in full-year profit to £75.4m.
In a trading update, the Hull-based company added that underlying sales had improved from late July, rising 5.5% in the 11 weeks to 18 September.
Northern Foods announced a restructuring drive in an effort to cut costs following news of falling profits in June.
The move has seen the group sell off its Irish division, which owns food and drink company Batchelors and food importing group Beck Smith, for £66.8m to pay off its debts.
The stock market reacted positively to Tuesday's announcement, with Northern Food shares ending the day up 3.81%.