Nearly 80 workers at a clothing firm, Nena Models in Co Donegal, were put on protective notice yesterday.
There is concern that the Finn Valley area, in the east of the county, could soon be left without a major employer in the textiles sector.
"This is another major blow to the area," said a Ballybofey-based councillor, Ms Alice Bonner, who is hoping to organise a meeting of public representatives, union officials, workers and company representatives on Monday.
"Manufacturing in this area has been virtually wiped out in recent years and with agriculture also depressed, this has become an unemployment blackspot," she said, adding: "We're being left with nothing."
Calling for the urgent decentralisation of a Government department to the Finn Valley area, she claimed there is a link between high unemployment and the large number of suicides in the region.
The textile sector has declined considerably over the past two decades, with the closure of companies such as Convoy Woollen Mills, which manufactured uniforms for the Garda and An Post, and linen yarn manufacturer Herdmans in Ballybofey.
At their peak, Herdmans and Nena Models, with plants in Convoy, Castlefin and Stranorlar, employed more than 1,000 people.
The protective notices were issued to Nena Models' remaining manufacturing employees - 60 in Castlefin and 18 in Stranorlar.
The issuing of protective notices was not unexpected. Aware of the uncertainty regarding the company's plans in Donegal, many of the workers only joined a union last week.
"We have been on short-time working three times in the past year," one worker said. "Unless we get another order, some people will be gone within two weeks, while it could be four weeks for others."
He said work that was formerly done in Donegal is now going to Morocco, Lithuania and Poland.
It is understood that the firm will retain some sales and administration support staff in Donegal but workers believe manufacturing could cease completely within a month.
No company representative was available yesterday to comment, but in the notice to the workers, the managing director, Mr Paul Sharma, said that "arising from tremendous market pressure" it is now "totally uncompetitive to produce in Castlefin".
Among Nena Models' major customers are Dunnes Stores, Littlewoods Brown Thomas and A-Wear.