One of Mauritius's oldest textile operators last week shut seven factories and cut 900 jobs.
Great beaches but high labour costs
High labour costs means that it is more profitable for Floreal Knitwear to make certain goods elsewhere.
The Mauritian textile industry employs 80,000 people, down from some 90,000 people last year.
Floreal Knitwear, which produces textiles for BHS and Littlewoods in the UK, now has five factories in Mauritius and employs 3,100 people.
Competition from cheaper producers such as China and Bangladesh is forcing Mauritian textile operators to rethink the way they do business.
Nicolas Maigrot, executive director at Floreal Knitwear, told BBC News Online the emphasis of the Mauritian business was now on producing value-added products, which required less labour.
"Basic products are no longer competitive in Mauritius, it is very difficult to maintain value as before," he said. " We see our delocalisation as complementary to our activity in Mauritius. It is not a substitute, it is complementary. "
More jobs to go
Job losses are set to continue, with one industry organisation anticipating a further 30,000 lay-offs before the situation stabilises.
Several textile companies moved to Madagascar to take advantage of cheaper labour costs.
But political instability there encouraged many of them to look as far afield as Asia, Danielle Wong, director of Mauritius Export Processing Zone Association told BBC News Online.
The way forward for the Mauritian textile industry is to concentrate on niche products, which require highly trained staff and heavy investment, she said.
"We have to go upmarket, we have to look for sophisticated design products," she added.
Earlier this year, the textile industry was hit by the closure of hundreds of Ralph Lauren outlets.
The shops were shut permanently after Ralph Lauren claimed that the shops had been using its trademark without permission.