"Only when a decision has been made to close the machine, then we can look at staffing."
Mr McCarty said it was a difficult time for the mill and Kawerau.
"It's a small town, a small community, it's not a proposal we have taken lightly."
He said the "vast majority" of staff lived in Kawerau or Whakatane, with a few in Rotorua and Tauranga, so if the proposal did go ahead flow-on effects were likely. Mr McCarty said problems began for the mill with the 2008 global financial crisis.
"This is not really a controllable issue," he said. "The market has changed dramatically. We can't sell the paper we are making and what we do sell is not profitable."
A staff member, who wished to remain anonymous, told The Daily Post those who worked on the paper machines, which print newsprint, were told about the proposal about 10.30am. Each machine had about 35 people working on it, the man said.
While he believed all those people would lose their jobs, the man said it would also have a follow-on effect throughout the business, right through to the cleaners. He expected "50 jobs at least" would be lost as part of a closure.
"The reason ... is, nobody's buying newsprint any more. It's all about money. They're not making any money," the staff member said.
He said some workers were worried about losing their jobs and how they would pay their bills. He said some staff had been there for 40 years.
A source close to mill workers, who did not wish to be named, said the announcement had not come as a shock to most employees.
"It's been coming for a while and they know it's not going to be pretty," the person said. "I've been told the mood is pretty sombre amongst workers."
He had heard the closure of a paper machine could result in the possible loss of even more jobs.
"There's not much you can do when there's no market for a product."
Mr McCarty said the mill had increased exports to Asia over the past three years to offset the decline in demand in New Zealand and Australia, however Asian demand was weakening and prices falling because of competition between newsprint suppliers.
"We have worked very hard to reduce costs to allow us to compete in the Asian market, however low newsprint prices, unfavourable exchange rates and oversupply to the Asian region has made this market unprofitable for us."
Mr McCarty said the Tasman site would continue to produce newsprint for the New Zealand, Australian and Pacific Island markets and was actively pursuing a range of renewable energy opportunities.