UP to 60 jobs are set to go at Selkirk's oldest mill.
And many face Christmas without redundancy payments.
Bosses at Heather Mills held an emergency meeting on Tuesday to tell its workforce the bad news.
Part of the South Bridge Street plant has plunged into liquidation with the remaining departments being placed into the hands of administrators.
The Border Telegraph revealed in October that the 116-year-old mill was in deep trouble.
But owner Andrew Bryars had refused to seek assistance from either Scottish Enterprise or Scottish Borders Council.
Bryars bought Heather Mills from Edinburgh Woollen Mills in March. Two separate limited companies, Border Weaving Company Ltd and Riverside Spinning Mills Ltd were formed to operate the different departments.
Up to 20 workers employed by Riverside Spinning will finish work as early as next week.
A letter from Bryars stated: "We regret to advise you that, due to the lack of orders and resulting deteriorating financial position of the company, the directors are taking the necessary steps to close and place the the company into liquidation.
"Unfortunately the company will no longer be in the position to make payments to you for services rendered under your contract of employment."
Liquidators Tenon Recovery have been appointed to wind the Riverside Spinning company up.
One worker told the Border Telegraph: "This has been on the cards for a few months, but it still comes as a shock when you are told you don't have a job any more.
"It's been downhill since this lot took over."
The remaining workers inn the 'top' end of the mill, employed by Border Weaving, will continue under administration over the festive period as a rescue buyer is sought.
But they are not holding out much hope. One, who we agreed not to name, said: "It's not looking good. We are needing a miracle even for some of us to keep our jobs."
Bryars hasn't returned any of our calls.
This article appeared in Border Telegraph 04 Dec 08
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