A notice filed with the state said 248 workers would lose their jobs. The last day for managers will be Aug. 29.
CEO Al Koch said the warehouse at 5445 Guion Road employs a total of 330 who distribute music CDs as well as video game hardware and software through its Crave Entertainment arm.
"We will still have substantial operations in Indianapolis," Koch said.
Handleman has specialized in distributing music to retailers, but Internet downloads have cut into its business. The company has a total of 530 employees.