At least 37 workers from Transfield Services alone were told on Thursday they would be unemployed in less than a day, with the union claiming many more from other companies were also given the boot so cheaper workers could be brought in from labour-hire companies.

AMWU organiser Brad Hattenfels said more than half the workers let go were forced redundancies directed by BlueScope as part of a "race to the bottom approach".

"This is just the start of what is a really worrying time ... these are steelworkers that work for contractors who are reliant on the industry surviving within the area," he said. "[BlueScope] will not use their alliance partners and will start using labour hire at the cheapest possible rates."

"The impact we've heard a lot about is on their direct employees but the reality is those being affected more are contractors."

Since 2001, Transfield took over a day-to-day maintenance contract with the company, employing full-time workers who had been with the plant - many for decades. Mr Hattenfels said sacking these highly skilled workers would have a hugely negative flow-on effect on the Illawarra economy.

"Somewhere along the line we need to take a good look at this idea of 'we'll just try and get as cheap and as nasty as you can' and everything will be all right. Well everything's not all right," he said. "They're doing the same to the local contractor to what they complain about when cheap steel floods the market [from overseas]."

BlueScope declined to comment.

Meantime, a public rally is scheduled at Fairy Meadow's Fraternity Club on Wednesday for workers, families, friends and the general community to take a stand. The flyer says: "Now is the time to make our voices heard and fight for our industry, our jobs and our region."