The news came as unions claimed Pacific Brands employees who are facing redundancy would lose some of their entitlements if they walked out early.

Pacific Brands says the terms are in line with the manufacturing award.

But the Textile Clothing and Footwear Union of NSW, which represents the workers, says they should not be penalised for leaving early if they found another job

Two hundred and eighty one Illawarra clothing manufacturing workers, many of them in tears, were told yesterday their jobs would be axed with the closure of the Bonds factory at Unanderra and the KingGee factory at Bellambi.

The announcement stunned the mostly female workforce, many of whom have worked for the iconic clothing brands for decades.

The company said the closure of both sites would be finalised next year, but federal MPs Sharon Bird and Jennie George have both been informed the Bellambi factory is to close this July and Unanderra in February 2010.

In the ASX statement, Pacific Brands chief executive Sue Morphet said the move was to "restructure and sharpen the focus of the business

Treasurer Wayne Swan said he was very disappointed at Pacific Brands' decision.

"Pacific Brands made it very clear that this decision was set in concrete some time ago and really predates the savagery of recent (economic) events,'' he told ABC Radio.