Shipping company Condor Group is to shed 70 jobs in the Channel Islands when it closes its logistics division.
The company blamed the economic downturn along with the scrapping of Low Value Consignment Relief in April 2012.
About 50 jobs are to be lost in Jersey, with a further 20 in Guernsey.
Ken Soar, Condor Group Director, said the decision to close Condor Logistics had been a difficult one, and stressed Condor Ferries would not be affected.
Mr Soar said employees whose jobs were to be cut would be offered above minimum redundancy packages and a chance to apply for jobs elsewhere in the Condor Group.
He added: "We are refocusing the business on our core activities operating lifeline ferry and shipping services."
Low Value Consignment Relief, which allowed companies based in the Channel Islands to send low value goods to the UK without paying VAT, was abolished in April 2012.
A statement from the Condor Group said since the ruling the volume of shipments between the islands and the UK had declined.
The statement said, as a result, Condor Logistics had suffered "significant losses" in recent months.
The company said it was also closing all of its logistics operations in the UK.
About 110 people currently work in that part of the business.