The N.W.T.'s diamond cutting and polishing industry has taken a hit this year due to the slowing economy and a falling demand for diamonds. (CBC)

A Yellowknife plant specializing in cutting and polishing diamonds from Canada's North is shut down for now, with its staff and owners hoping the territorial government will help save the facility.

Arslanian Cutting Works opened in 2000 as the diamond industry was emerging in the Northwest Territories. But the industry has recently been hit by the global economic slump and dozens of skilled diamond workers are now unemployed as a result.

"We've laid off 52 people. We're currently in limbo," company manager Bob Bies told CBC News.

"We just don't have the money right now to continue. A lot of the money that we have is invested in inventory. The recession has closed down retailers. Other retailers aren't buying as much as they normally have in the past."

During its nine years of operation, the plant's production peaked at more than 4,000 carats a month.

Arslanian Cutting Works is hoping a loan from the N.W.T. government will save the facility. The government is considering the company's proposal.

"In order that we can operate, and keep all of our staff in place, we'd be probably looking at around $10 million," Bies said.

"We keep operating at a level of production …where we're going to make money."

The plant's closure came as bad news for Hrant Babasyan, the plant's foreman, who moved his family from Armenia to Yellowknife around the time Arslanian Cutting Works opened.

"I moved all my family here, all my children here. They're Canadians, except me and my wife," said Babasyan, who has 32 years of experience as a diamond plant foreman.

Babasyan said he and his wife have been waiting for two years to see if they can obtain landed immigrant status. He said his work permit is tied to his job.

"Sometimes sleeping is very bad," he said.

"This is the first time in our life, [a] long time we're sitting and doing nothing. This is very bad for us."

Falling worldwide demand for diamonds forced another company, Laurelton Diamonds, to close its Yellowknife diamond cutting and polishing facility earlier this year.