More than 90 workers at Couristan Carpets in Youghal, Co Cork, are to lose their jobs by Christmas.
The 92 workers at the Store Street factory were informed on Wednesday but the company only made the information public yesterday.
George Couri, chairman of the US parent company, said the decision to close was taken due to losses over the past three years.
"The main reason for these losses has been the high costs of manufacturing in Ireland as against our competitors who are now manufacturing in Poland, South Africa, India, Turkey, China, Egypt and Thailand. Couristan would like to take this opportunity to thank all its employees, customers and suppliers who have supported them over the years."
Cork East Fine Gael TD David Stanton has called on the Government to do everything possible to provide employment in Youghal.
He said the closure of Couristan Carpets was a serious blow to Youghal, which has seen the closure of Artesyn Technologies and Kodak Eastman in recent years.
Mr Stanton said: "We have lost 2,000 plus jobs over the last few years in Youghal. People are having to leave the town for work and that is having an adverse impact on Youghal. All of the businesses in the area are feeling the pinch . . . Why should people have to travel 40, 50 or 60 miles for work?"
Couristan Carpets Ltd was established in Youghal in 1984 following the closure of the Youghal Carpets headquarters plant which for decades was the bedrock of the local economy. It once employed almost 1,000 workers.
The closure marks the end of carpet manufacture in Youghal which began in 1954. Carpet manufactured in Youghal has been shipped to upmarket buildings worldwide including major hotel groups such as Marriott, Hilton, and Sheraton in the US, Westminster Abbey in the UK and the palace of the Sultan of Brunei.