The international textile company, Fruit of the Loom, has said it plans to wind down and close its facilities in Donegal and Derry.
The company said the move may result in the loss of up to 630 jobs.
In a statement, Fruit of the Loom said it plans to wind down spinning, knitting and dyeing facilities at Buncrana and Campsie over the next four to five years as part of a restructuring of its European manufacturing operations.
Most operations will be relocated to Morocco.
Reacting to the news, the Tánaiste, Mary Harney, said that the firm's decision was very disappointing but refelected the fact that the sector was no longer competitive, not just in Ireland, but in this part of the world.
Ms Harney said the priority now must be to continue to attract sustainable industry consistent with our recent economic performance.
