Businesses linked to the steelworks are feeling the pinch from BlueScope's move to switch off the No6 blast furnace.
The steelmaker shut down the blast furnace as part of a decision to leave the export market.
With less steel being made at Port Kembla, it meant there was less work for related businesses.
One of those affected was Shinagawa Refractories at Unanderra, which made the refractory bricks used in the blast furnaces.
The company announced the following downturn meant they would be laying off 39 workers.
Australian Workers Union assistant branch secretary Wayne Phillips said it was "a tragedy".
"We accept ... that with the No 6 blast furnace closing, they [Shinagawa] lost a fair chunk of their work, but it's certainly not all their work," Mr Phillips said.
"We don't believe they'll have enough people there to do the work."
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