The deal struck between IDA Ireland and Fruit of the Loom provides some short-term security for the remaining 1,300 workers in Donegal. But much will still depend on the group's trading performance and future ownership.
As part of the agreement, Fruit of the Loom's chief operations officer, Mr Bill Farley, said, there will be no job losses in 1999, although 700 sewing jobs at its Irish-based fleece production operation may be vulnerable after that.
These jobs will now be classified as "at risk" by IDA Ireland as it watches for signs of the company's future intentions.
The remaining 600 jobs attached to its high-tech fabric production division are the most secure, with the company offering guarantees that none of these will be cut until at least 2006.
In announcing the 770 job losses and the transfer of T-shirt production to its sister company in Morocco yesterday, Mr Farley said the company should have made this move some time ago due to the "economics" of the situation.
The attraction of having low-margin T-shirts produced at a fraction of the wages paid in Donegal has always been obvious, and IDA Ireland has worked hard to sustain those jobs for as long as possible.
Their proximity to the fabric production plant in Derry was a primary factor.
The structure under which grants are paid out to multinationals is designed to provide as much security for the workforce as is conceivably possible.
An acrimonious meeting between Mr Farley and the Tanaiste last September drew attention to the safeguards which had been stitched into the three grant-aid contracts with Fruit of the Loom since its arrival in Ireland more than 10 years ago.
At that time Ms Harney said that, based on legal advice, she was satisfied that Fruit of the Loom owed IDA Ireland more than £6 million and that that figure could rise to £10 million if 700 jobs were to go.
The new agreement seems to have involved a compromise on both sides, with Fruit of the Loom to pay £5 million to IDA Ireland by the end of January and handing over its disused factories to the State agency to offset a further payment of £2 million.
The Government is waiving the remainder - up to £5 million, depending on the value of the factories - in return for a guarantee of the 1,300 jobs.
The Tanaiste has reiterated the financial hold which IDA Ireland effectively retains over Fruit of the Loom, stating that if the remaining 1,300 jobs are cut it will still owe the State £12 million.
Some analysts suggest that even if Fruit of the Loom paid IDA Ireland the £10 to £11 million originally demanded, it would still have been able to recover that cost over three years in Morocco.
The main source of security for the group's Irish workforce will be sales performance.
Fruit of the Loom has reported some recovery in its financial position in each of the first three quarters of 1999, largely driven by cost-cutting measures such as the relocation of labour-intensive manufacturing to low-cost locations.
But sales have again begun to slump, and analysts suggest it may be about to warn the stock market that profits have once again started to slide.
Rumours that Fruit of the Loom could be the subject of a take-over bid may also offer some hope. One possible suitor mentioned is the VF corporation of the US, which already has a relationship with IDA Ireland through its Co Louth subsidiary, Lee Jeans.