It is understood that this is due to the loss of a Tesco contract to supply ready-made chilled own-label pizzas.
Unite, the union, is to hold talks with the company on Friday (August 19).
The union branded the threat to 350 jobs as “a hammer blow” for the workers and the local economy.
Unite said the total workforce is about 600, of which 450 are members of the union.
Loss of own-label pizza contract
A 2 Sisters’ spokesman confirmed the loss of the own-label pizza contract from February 2017, which had been given to another supplier.
The spokesman said: “Our immediate priority will be to mitigate this loss and explore other opportunities to gain new business.
“However, this does mean we will need to start formal consultations with colleagues and their representatives.
“Clearly this is disappointing news, but we will continue to explore all other options available to us.”
Unite regional officer Andy Shaw said: “This is very bad news for the workers and their families, and a hammer blow for the wider Nottingham economy.
“It is early days and details about the scale of the job losses remain unclear, as does a time-frame for any redundancies. We expect a full briefing when we meet the management on Friday.
“Unite is committed to avoiding compulsory job losses and we will be actively exploring avenues such as redeployment and voluntary redundancy.
“The union will be giving all possible support to our members in the days and weeks ahead at what is a very traumatic and difficult time for them.”
In May, Unite members started voting on possible strike action at the Pizza Factory over an outstanding pay claim for 2015. It had accused the company of trying to get staff to sign away their terms and conditions in exchange for a non-negotiated deal.
Earlier this month workers at 2 Sisters’ R F Brookes factory staged a protest outside a Marks & Spencer store in Cardiff as part of action against proposed changes to employment terms.