The company said it needed to "address duplication of capabilities and inefficiencies" and become more efficient.
More than 1,000 people are employed in Street, many across the distribution centre, and it is understood they were told the news on Wednesday.
Clarks' US site in Boston, Massachusetts, will also be affected.
The Western Daily Press newspaper initially reported the planned job losses on Thursday.
The firm said the restructure was due to "a highly demanding commercial and economic environment with increasing competition and intensified customer expectations".
The statement said: "This reorganisation unfortunately means that we are in conversations with approximately 170 people who will leave our business across our global operations over the coming month."
A source close to the company told the BBC the majority of jobs would go in Somerset.
James Heappey, Conservative MP for Wells, told the BBC he also understood the majority of job losses would be in Somerset, which was "clearly very bad news for Street".
"I think it's going to have quite an impact because that's quite a number of people to be looking for work in a community that's relatively small," he said.
The BBC understands the trade union Unite is in talks with the company about the job losses.
Deputy leader of Mendip District Council, Tom Killen, said it was "working with a number of key delivery partners, including Jobcentre Plus".
He added: "There is direct liaison with the companies to discuss how best to provide practical assistance and support for affected employees."
Clarks began work in Street 191 years ago, when brothers James and Cyrus Clark decided to use their tannery to make sheepskin slippers.
The company website says: "Our feet have stayed firmly rooted in Street. It's where Clarks started. It's where our heart lies."
Shoe manufacturer Clarks is cutting 170 jobs, many of them from the Somerset village where it began.