About 1,500 jobs were lost yesterday after Granville Technology - the maker of Tiny and Time computers - collapsed into administration.
Recovery experts from Grant Thornton announced the job losses at Granville Technology after deciding the business could not be traded as a going concern.
The 1,500 redundancies will be at the company's head office at Burnley, Lancashire and among staff working at 80 stores nationwide, including Birmingham.
A statement from Grant Thornton said the group had fallen victim to continued price deflation in the personal computer market, exacerbated by a softening of consumer demand in recent months, and pressure from suppliers.
It added the current trading situation meant the redundancies were "inevitable".
While the company was profit-making in the year to June 2003, Grant Thornton said it was believed Granville Technology had been suffering losses of up to £2 million a month in the period since January.
There are thought to be more than two million Tiny personal computers and laptops in UK homes, as well as thousands of Time computers in schools, colleges and universities.
Granville sells its products through high street stores, called The Computer Shop, as well as through other outlets such as Tesco, Asda and Woolworths.
Grant Thornton said it would maintain the existing customer support operation and that it would set up a helpline to assist customers, including those who have made purchases but not yet received goods.
It is expected that Grant Thornton will make a further announcement on how customers will be affected by the news.
Many computers have been sold with warranties, while some deals with schools and colleges are thought to include service contracts.
Granville was formerly known as Time Group and three years ago acquired Tiny Computers out of administration.
It generated sales of more than £200 million and profits of £2.5 million in the year to June 2003.
No accounts have been filed since then, but Grant Thornton said management accounts demonstrated losses of between £ 1 million and £2 million a month.
An hour after Grant Thornton announced that Granville had gone into administration, angry workers gathered at the factory's front gate and said they had still had no official word from management.
Saf Ahmed, 26, who works in sales, said: "At the moment all we are getting is news from the television and internet and so on.
"We know they've gone into administration but no one has officially told us yet.
"All we know is that most of the staff are being made redundant and a tiny amount are being kept on, but we still haven't been told who.
"The main concern for people inside is whether the wages are going to be paid or not."
Customer services worker Qamar Ashraf, 21, added: "All they have been telling us all morning is that there is going to be an announcement.
"We were told there would be an announcement at about 11am and then we heard the news at lunchtime, but we still haven't had anything confirmed to us by the company."
Another sales worker, who did not want to be named, said it was "disgraceful" that the workers were still being kept in the dark.
He said: "It's below the belt. They should have told us what's going on."