Staff from Hugos Lounge in Kings Cross are considering legal action against the NSW government after losing their jobs due to the closure of the venue.

Owner Dave Evans blamed the state's controversial lock-out laws for a decline in revenue, which put the bar and nightclub into administration.

Mr Evans and 70 staff who have been made redundant will announce details of their proposed class action on Thursday.

The club said it had suffered a 60 per cent drop in revenue and 80 per cent drop in customers since 2012 when new licensing restrictions were applied to venues in the inner-city suburb.