The futures of 127 paper company employees at the Dalmore mill near Edinburgh are under threat following a review of operations.
Curtis Fine Papers said it was considering merging its two mills and operating from its bigger plant at Guardbridge, near St Andrews.
Managing Director Alban Denton announced the move following talks with workers and union officials.
The posts at risk represent 25% of the company's total workforce.
Mr Denton discussed the company's plans with Graphical, Paper and Media Union officials.
Posted losses
He said the company would work with representatives of the workforce to look at ways of avoiding redundancies, reducing redundancies or helping minimise their impact.
The company cited tough trading conditions as the reason for its decision. It has operated its two mills as a single business unit since 1989.
Curtis Fine Papers posted a £1.28m profit in 2002, but suffered a loss of £269,000 the following year.
The company said it aimed to return to profit in a year's time by focusing on profitable business, reducing costs and operating from a single site at St Andrews, which employs 305 workers.