Youghal Carpet Yarns in east Cork is to close with the loss of around 190 jobs.
85 members of staff had previously been laid off as part of a restructuring plan agreed last December. A total of 275 members of staff will now depend on the redundancy package put forward by the company.
An offer by the company of statutory redundancy has been rejected, according to SIPTU spokesperson Mr Joe O’Flynn.
Under law, all workers are entitled to a minimum redundancy package. This amounts to half a week's pay for each year of employment between the ages of 16 and 41 years or a week's pay for each year of employment over the age of 41.
Mr O’Flynn said the offer of statutory redundancy did not reflect "the loyalty and commitment workers had invested in the company" over the years.
He added that he would be seeking an urgent meeting with the government and the IDA to discuss the situation.
The Cork plant made raw materials for carpet-makers and exported mainly to the European and export markets.
Youghal Carpet Yarns said the downturn in demand for carpets had worldwide repercussions for the industry and the raw materials for carpet making that it supplies.
The closure could have serious consequences for Navan Carpets, which is supplied by the Cork plant, and for the general economy of the east Cork area, which has suffered major closures in recent years.
The Tánaiste and Minister for Enterprise and Employment Ms Mary Harney said she was deep disappointed at the announcement of both Youghal carpets and the Ardagh glass plant in Dublin.
"This is a huge blow to the workforce in both companies and their families. Many of these workers have spent their entire working career with these companies," she said.
Ms Harney said she had spoken to the Director General of FÁS to organise an assessment of the skills of the workforce in each company and to arrange training to help those involved find alternative employment.