Tesco has confirmed that around 1,100 jobs are set to be cut from its call centre in Cardiff with the centre planned for closure in February.
The company will be combining all of its customer engagement centres (CEC) into one site in Dundee.
First Minister Carwyn Jones has pledged help for those affected by the job losses.
Tesco boss Matt Davies said the “retail sector is facing unprecedented challenges” and it had to meet the “changing needs of our customers”.
“To help us achieve this, we’ve taken the difficult decision to close our customer service operations in Cardiff.”
Mr Jones confirmed that talks had taken place between himself and the retailer, saying that he had “expressed [his] concern about the proposals.”
“I pressed on the chief executive the need for a decent and generous package for the workers there,” he added.
“I offered whatever help we can offer as a government and of course there will be help available to those affected by the closure.”
Union USDAW divisional officer Nick Ireland said: “Tesco’s Cardiff call centre staff are understandably shocked by the announcement of the company’s planned closure, they are being briefed by managers this afternoon.
“This is clearly devastating news for our members and will have a wider impact on south Wales, as so many jobs are potentially lost to our local economy.”
News of the closure was raised in the Senedd by Cardiff North Labour AM Julie Morgan.
She said: “It’s been there for many years – I’ve visited it on many occasions. What can the cabinet secretary do with this dismaying announcement?”
Economy Secretary Ken Skates replied: “I have instructed my officials to put together a package of support for those who could be affected.”
Plaid Cymru called on the supermarket giant to clarify whether it has received any assistance to move to Scotland, or whether a cost-cutting decision has been made.
Shadow economy secretary Adam Price said: “In recent years Cardiff has seen sustained growth in the retail sector, but we’re now facing a difficult future due to the weakness of the pound and the prospect of increased food inflation.”