The 21 people working at Serco's call centre in Brora - home to a population of only 1,200 - have been told that their jobs will go as the private company shuts its local base in east Sutherland.
The workers, who handle public health campaign inquiries, were offered new posts, but 225 miles away in Glasgow.
Deirdre Mackay, Highland Council's Sutherland Area Leader, described the impact on the rural community as "truly devastating".
In crude population terms, even when adding the people in the surrounding area, it is the equivalent of 6,000 jobs going in Glasgow or almost 5,000 in Edinburgh. But the true impact will be greater given that those over the age of 60 is almost 30 per cent in Brora, compared to a little over 20 per cent for the Scotland as a whole.
Ms Mackay said the move was particularly disappointing given the long-standing belief that new technologies would be game changers for rural communities such as Brora, with IT opening up new opportunities.
"But here we see a big national firm, which makes its money through public sector contracts, electing to walk away from a workforce which has served them well and to centralise their business in Glasgow," she said. "This is a real David and Goliath story and the offer of relocation to Glasgow speaks for itself."
Recent research into the effects of welfare reform had shown that East Sutherland was the second worst affected area in the Highland Council area, she said.
Serco blamed the move by customers from 0800 to 0300 numbers and from phone to online channels and text, which required fewer people to service. The company said that over two years demand had fallen by 50 per cent. The proposal for the future was for the service to be run from its Glasgow site.
A 45-day consultation period with staff has begun and Garry Robinson, Serco's Customer Services Director, said. "This has been a very difficult decision to make. We will be giving all our colleagues every support during the coming weeks and would like to thank all the team in Brora for their commitment, professionalism and the quality of their work in delivering such excellent customer service."
Meanwhile on Harris, the GSH Group, a national building repair and maintenance services firm, confirmed it will centralise all its UK-wide operational and administration activities in its headquarters in England. It means the loss of 20 jobs on the island.