Axminster Carpets has reopened for business after a deal was struck to save the company.
Axminster Anglican minister the Reverend John Streeting said the job losses would affect many families.
More than 100 workers met outside Axminster Guildhall to gather names and hand out leaflets.
Axminster Carpets, which is behind the development, said the application had been fully supported at every stage.
Talks are continuing about the future of Axminster Carpets in Devon, where about 400 jobs are at risk.
Carpet-making operations in Axminster were scaled down and yarn production at Buckfast stopped.
Mayor of Axminster Andrew Moulding said it was "extremely sad and troubling news".
Staff at Axminster Carpets set to lose their jobs are being offered support.
East Devon Council said the Axminster Job Club and the Citizens Advice Bureau would also be involved in its efforts.
About three-quarters of the luxury carpet firm's 400 staff in Axminster and Buckfast are to be made redundant, administrators said.
The luxury carpet maker, which can trace its beginnings back to 1755, employs about 400 staff at its plant in Axminster.
About 100 employees have been retained but carpet-making operations in Axminster are being scaled down and yarn production at Buckfast has stopped.
The firm, which employs 400 people in Axminster and Buckfast, said it would make an announcement on its future by next Tuesday.
The land at Cloakham Lawns is owned by Axminster Carpets Limited, which said the development had been fully supported at every stage.
Save our Parkland (SoP) had gone to the High Court over plans for housing and business units at Cloakham Lawns in Axminster.
More than 6, 000 people have signed a petition to save Axminster Carpets.
Buses are also running between Exeter St Davids and Axminster and trains are unable to call at Pinhoe, Whimple and Feniton stations.
Employees at Axminster Carpets have taken to the streets of the town to urge local people to back a campaign to save the firm.
Axminster's mayor Andrew Moulding said he was "trying to find a solution" to the company's financial difficulties to ensure jobs stay in the town.
The new company, known as Axminster Carpets (2013) Limited, is focussing on its retail network and the domestic consumer side of the business, managers said.
Axminster Carpets was previously one of the county's biggest private employers.
She said it was key to get the "local community behind Axminster" so any potential buyers would see a community that was "solidly behind the business".
About 100 employees are being retained, but carpet-making operations in Axminster are being scaled down and yarn production at Buckfast is to stop, administrators Duff and Phelps said.
Philip Stone, whose family has worked collectively for Axminster Carpets for more than 100 years, said he was "very disheartened" at the announcement and the potential prospect of losing his job.
The origins of Axminster carpets can be traced back to Thomas Whitty, who began making carpets and rugs in the town in 1755 using what became known as the Axminster method of weaving.
The Bishop of Exeter said he had asked clergy to pray for those who lost their jobs at the company's sites in Axminster and Buckfast when the company went into administration last Tuesday.
The origins of the luxury carpet maker can be traced back to Thomas Whitty, who began making carpets and rugs in the town in 1755 using what became known as the Axminster method of weaving.
Mr Moulding, who is also deputy leader of East Devon District Council, said Axminster Carpets had been the "cornerstone of the town for many years" and the community "relied on the strength and viability" of the firm.
Today's primary school children tend to learn songs and lines for a play, as well as useful tools like times tables, says Mark Brown, head teacher of St Mary's Catholic Primary School in Axminster, Devon, but rarely whole poems, as their grandparents would have done.
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