In March this year, the firm said it planned to close production on one bakery line and review the viability of its bakery operation Gateshead.
Distribution and transport depot operations at the site will be unaffected. But employees in the manufacturing and support departments are at risk of redundancy, said a spokesman.
A consultation has begun with about 119 affected staff at the site which employs 263 people.
Pat Love, general manager, Allied Bakeries Northern Region, said: “The potential closure of manufacturing at Gateshead has been an extremely tough decision and in no way reflects the commitment and efforts of all those who are currently working there.
“Our announcement is in response to the highly competitive nature of the market we operate in, the level of investment needed to bring the site to an acceptable standard, the need to strengthen our overall capabilities and our ability to respond to change in the future.
"Our focus now is working with those who are likely to be affected by the company’s proposal.”