Leicestershire has suffered its single biggest redundancy blow for 20 years with the loss of 1,200 jobs.

AstraZeneca yesterday announced it was to close its Loughborough pharmaceutical plant next year as part of a worldwide shake-up of the business.

Staff were told of the closure in a marquee in the grounds of the site.

Business and political leaders called for immediate action to ensure the impact on the town was minimised. Martin Traynor, managing director of Leicestershire Chamber of Commerce, said: "This is the biggest single redundancy announcement in the county for 20 years. It will have a massive economic impact on Loughborough, there's no question."

Loughborough MP Andy Reed said: "The word 'devastating' is overused but I think that is the only way to describe this."

The 69-acre research and development site is Loughborough's second-biggest employer after the university.

The company said the closure was nothing to do with the performance of the plant, but part of a decision to scale back on research globally.

One of the biggest victims of the cutbacks was research into respiratory and inflammatory diseases, which forms the bulk of the site's work.

About 8,000 jobs at AstraZeneca will go over the next four years and small plants in London and Cambridge and one in Sweden will also shut, reducing worldwide sites to 13.

Spokesman Chris Sampson said: "This is nothing to do with anything specific about the Loughborough site. It is more to do with our research and development operation globally needing to be more productive.

"Because of that, we have got to reshape our business to ensure we have got the right structure to be successful in the future. Part of that means consolidating our research business into fewer sites."

Some of the work will transfer to Mölndal, Sweden. Staff will be offered the chance to relocate there and to AstraZeneca's research site in Alderley Edge, Cheshire.

Mr Sampson said: "It's too early to say how many positions will be available. More will be known in the next few months." He said the closure would go ahead by the end of next year.

It is the biggest jobs blow since the late 1980s, when textile firm Corah closed its Leicester factory with the loss of more than 1,200 jobs.

The largest in recent years came when biscuit firm McVitie's closed its Ashby factory in 2004. It employed 900 people.

Mr Traynor called for the East Midlands Development Agency to work with other groups to support the staff and help ease the impact on the town.

MP Mr Reed said he would be talking to Business Secretary Lord Mandelson and firm executives about ways of saving as many jobs as possible.

"Hopefully, some of those people will be able to relocate but it is still hard to come to terms with the fact that the massive site they have here in Loughborough is to close," he said. "There has been a consultation with staff since January so they were aware something would happen.

"I did not think it would be so severe though. I thought the jobs would go across the sites in the UK and perhaps they would strip out a layer of management here.

"There is little positive to take out of this but the company has said the site will close in 2011, so there is at least some time to prepare."

One worker, who did not want to be named, said: "People were stunned and the mood has been very subdued. They have not told us why. They have just said this is what is happening.

"I think it is a completely stupid decision by the management to close down a fantastic research facility."

Another employee said: "It's upsetting to say the least."

AstraZeneca's staff are among the best paid in the county. They earn an average salary of £35,000, compared to the average of £26,000 for Charnwood as a whole.

Professor Eric Pentecost, economics lecturer at Loughborough University, said: "Some of the staff may leave the area or even migrate overseas to find jobs of equivalent skills and pay.

"There could be other jobs that come in, but I suspect they won't be on the same level and this will have a big impact on the area."