Transport company Toll Express has announced plans to move its Kemblawarra office to Eastern Creek in Sydney, making the site's full workforce of 17 employees redundant.
Devastated workers were gathered together on Tuesday evening and told the office would be relocated on August 1.
One employee, who did not want to be identified, said the news had come as a shock.
"No-one had seen it coming," he said.
"The business has been going good.
"It's terrible - I don't know why they've got to take it out of the Illawarra."
The employee said the tight-knit group of workers had been left wondering what to do next.
"It's like a big family there, you know what the Illawarra is like, we all look after each other," he said.
South Coast and Southern Transport Workers Union sub branch official Lee Lawler said the company had held consultation with the union in line with the workers' enterprise agreement.
He said the workers had good prospects for redeployment within the company.
"The union is confident that we can work with the company through the issues facing these guys and resolve things to everyone's satisfaction," Mr Lawler said.
He said the company had recently advertised for employees for its other Illawarra operations.
However, Mr Lawler said the freight transport industry in the Illawarra was "depressed".
"There's always seasonal peaks and troughs but things are tough in the Illawarra at the moment for general freight," he said.
"But generally the industry is a bit depressed in the region at this time and we're looking forward to some investment in the port to hopefully generate more jobs in the transport industry."
Toll spokesman Andrew Ethell said the company was working with affected employees to find them "other roles within the Toll Group either locally or at Eastern Creek".
"Redundancy is our last option," Mr Ethell said.
"The Wollongong area will now be served directly from our expanded Eastern Creek facility in western Sydney. This decision has been taken to increase efficiency in the business and is expected to lead to higher service standards for our customers."