The exit poll suggested Labour would crash to its worst result since 1924 and its fourth defeat in a row - a second under Mr Corbyn.
Shadow chancellor John McDonnell appeared visibly shocked as the forecast was revealed.
Mr McDonnell sought to blame the fact that "Brexit has dominated" the election campaign and defended the party’s left-wing policies under Mr Corbyn.
But he said "appropriate decisions" would need to be made about the future of the Labour leadership if the party suffered a crushing defeat.
Margaret Hodge, an early critic of Mr Corbyn over his handling anti-semitism claims, responded on twitter: “Deliberately misreading the exit poll from McDonnell.
“If this bears out, this is the utter failure of Corbyn & Corbynism. There is no other way of looking at it.”
But there was a swift attempt to defend Mr Corbyn’s legacy from his allies, with shadow justice secretary Richard Burgon posting on twitter: “If, as it seems, this was a Brexit election then the next one won't be given Johnson’s Thatcherite agenda.
“And Johnson must continue to be fought with radical alternatives, not triangulation, that challenge the Tories head-on.”
Speaking on ITV, Mr Balls said: “It’s very unusual in British politics for an opposition party to lose seats election to election.
When Ed Milliband did that in 2015, he went in hours. When Ted Heath did that in ‘74, he went quickly… both Michael Howard and Neil Kinnock, they actually gained seats and ended up going.
“If we see a loss of seats on this scale, it’s clearly untenable for Jeremy Corbyn to carry on as Labour leader. The question will be whether John McDonnell will keep the group together as acting leader.”