A spokesperson from administrator PPB Advisory confirmed around 300 redundancies, with 20-30 staff staying on while proceedings continue.
The Australian Manufacturers Workers Union (AMWU) said it could be some time before staff get what is owed to them.
The union said consultation between Australian Envelopes and the administrators had shown the bank is owed more than the asset value of the company, which means most creditors and staff are likely to lose out.
AMWU Victorian secretary Steve Dargavel said staff members were “crushed” by the redundancies, which he said were unexpected.
“Australian Envelopes constantly assured all the staff that things were going great, and because there was so much work on the floor, they never thought anything of it,” he said.
“The truth was the company had been going backwards for years and it was a massive ambush on them when they were told the company had no money left to pay them.”
Dargavel spoke of one distraught couple that worked for Australian Envelopes who had only recently taken out a home loan.
“It is very hard for the workers involved; many of them have been there for decades. One guy has been there from age 14 to 40. There are a number of husband-and-wife teams. We are really not happy with the management of the company,” he said.
“We are hoping for Australian Envelopes to go into liquidation as soon as possible so that staff members can begin the claim for their entitlements through the government.”
Dargavel has put the failures of Australian Envelopes down to poor management over a number of years.
“The company has had a high-volume, low-margin play that just wasn’t working for them for some years. Recently they mishandled discussions with potential investors and the bank got fed up and pulled the plug.”
The administrator said the ideal resolution would be a sale of the company, which would allow for staff members to be rehired, but it was too early to tell if this will happen.
A creditors meeting has been scheduled for 11 July.
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