Betta Foods, the maker of Capricorn liquorice, ice-cream cones, marshmallows, and jellies, went into voluntary administration in January.
Administrator, Cor Cordis, says 39 employees, including 28 factory workers and 11 administrative staff, were made redundant on Wednesday.
The restructure was needed to keep the business operating, managing partner Bruno Secatore said.
“This is always a very difficult decision when you’re trying to save a company,” he said.
Secatore said the situation was “fluid” but there were no plans for more redundancies.
Staff entitlements have priority status among creditors.
The company had 180 staff before the cuts.
Secatore said Cor Cordis had received 26 expressions of interest for the purchase of the Broadmeadows-based business, and hopes to announce its sale within weeks.