Leading print firm Sunstreet Printers is set to make around 40 people redundant and re-locate 13 others into different jobs.
Managing director Dave Ramsden said talks were taking place with individual employees and already a number had volunteered for redundancy.
"We are a major employer in the town and want to stay that way, but we are having to reduce the workforce to safeguard the other jobs and the long-term future of the business," he said.
Sunstreet, which employs 140 people at the moment, is a printing, storage and distribution business, with customers including leading names from the mail order, financial services, retail and manufacturing sectors.
Mr Ramsden said: "We have a good future in major areas of the business, but have become uncompetitive in others.
"We need to restructure to focus on areas of growth, in response to the needs of our customers.
"The emphasis is on keeping people employed, and we are doing all we can to do that, but unless we reduce the workforce we are putting everyone's jobs at risk," he said."
One of those who lost their job said: "The way we have been treated is disgraceful, and a lot of us will be taking the case to an industrial tribunal. It is a great shame for the town when a big employer like Sunstreet starts shedding jobs."
Sunstreet, founded in the early 1920s as Keighley Paper Mill Co, has three sites, at East Parade, Chesham Street and Gresley Road.
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