First Milk has announced plans to close one Scottish creamery and scale down operations at another after failing to find buyers for the businesses.
The dairy co-operative put its Arran and Campbeltown creameries up for sale last year after determining they were "not core to its business strategy".
In a statement, the co-operative said it had started employee consultation on proposals to close the Arran Creamery.
It is also consulting with Campbeltown staff on scaling down operations.
However, it added talks were ongoing over the potential sale of the Campbeltown factory to its local Kintyre farmer members, "with the active involvement of the Scottish government".
It said it was "envisaged that the farmers will form a new co-operative who will operate the creamery independently of First Milk."
Five jobs at Arran and 11 posts at Campbeltown are at risk.
First Milk chief executive Shelagh Hancock said: "We are deeply disappointed that it has not been possible to conclude a sale of Arran Creamery.
"We remain hopeful that it will be possible to secure the future of the Campbeltown Creamery in the ownership of the local farmers and the proposed changes that we have announced today will help with that."
James Barbour, chairman of the Kintyre milk producers working group, said First Milk had "worked hard to secure a sustainable future" for Campbeltown Creamery.
He added: "Unfortunately, it has not been possible to secure an external buyer and yet we believe that it is important to retain processing capacity on Kintyre for the long-term security of the dairy farmers here.
"As a result, we are working together to try to secure the site for the future, although there is still considerable work to do to bring this to a conclusion."
NFU Scotland milk committee chairman John Smith described the developments as "extremely disappointing".
He added: "There has been a cloud of doubt hanging over both factories for the past 15 months, since First Milk announced their intention to offload the creameries in April 2018, and this decision is unfortunately the outcome."