The Australian Workers Union has called the decision by Costa Group to close a local business "rotten."
After 40 years, Mittagong Mushrooms will close its doors on June 27 for the final time, forcing 64 people out of work.
Australian Workers Union branch secretary Wayne Phillips said the decision was a "hell of a shock to employees and the union".
"The people there work hard, they did everything the company asked them to and it wouldn't pay for upgrades to the building or the equipment," Mr Phillips said.
Costa Group corporate affairs adviser Michael Toby said the group had made the decision to close the site because it was not profitable and there was not enough turnover to keep it going.
"It's an uneconomical site and it's not profitable. It has old buildings and equipment and we have taken the unfortunate decision to close the site on June 27," Mr Toby said.
Mr Phillips was at Mittagong Mushrooms on Tuesday when the announcement was made and he said it was an emotional scene.
"Employees were extremely upset, the majority of the staff left in tears," Mr Phillip said.
Note: Li-sun Exotic Mushrooms, Mittagong is a different business and is not closing down...So its all systems go for Dr. Arrold, his team and the wonderful exotics growing in the old railway tunnel. The next tour is on Sunday, June 8.