Palm City, a major employer in the region, has been sacked by the city of Milan as part of a dispute over the wage bill.
Sources say that the firm, based in the city’s central suburbs, has lost about 80% of its workforce in the past 12 months.
The news has been met with widespread outrage in the Italian footballing world, with supporters saying it shows a failure by the Milanis to invest in their own employees.
“We are outraged by the news, the loss of the Palm City factory, which has been a major pillar of the city since the 1960s, and a further attack on the city and its people,” a spokesman for the local football club said.
The company is also losing some staff due to the cost of redundancy, according to local media.
Palm City, which was founded in 1960, is owned by Italy’s oldest industrial group, PSA.
In a statement, the company said it was working to find “a viable alternative” to work for it.
“The firm is looking at the options available to it and in the meantime the workers are being supported by their employers, and we hope to be able to resume operations as soon as possible,” the statement read.