About 1,500 jobs will go after the UK's largest computer maker, which produces Tiny and Time PCs, went into administration and closed its 80 shops.
Tiny's owner has been hit by falling prices and fierce competition
Lancashire-based Granville Technology Group has been making monthly losses of up to £2m since the start of the year.
All directors of the company, except its non-executive chairman, left ahead of Wednesday's announcement.
Many customers are believed to have paid for goods in recent days but have yet to receive them.
A helpline has been set up to provide information to customers and creditors: 0870 830 3288. E-mail address is: email@example.com.
Customers and creditors now face an uncertain future as computers were sold with warranties and deals with schools and colleges included service contracts.
Administrators Grant Thornton have said they will maintain a customer support operation and plan to make a further announcement soon.
About two million Tiny and Time PCs are used in homes and schools around the UK.
Granville's financial situation worsened in recent days, leading to the closure of all its Computer Shop stores across the UK on Tuesday - shoppers had been told the closures were for stocktaking.
Grant Thornton said the scale of the company's losses meant that it could not continue trading making redundancies "inevitable".
"The group has fallen victim to the continued price deflation in the personal computer market," said joint administrators Andrew Hosking, Martin Ellis and Les Ross.
Customers were told the company's stores were shut for stocktaking
Granville employs about 1,600 staff, with most employed at its headquarters in Simonstone, near Burnley. Only about 100 will keep their jobs for the time being.
Staff were told about its financial position on Wednesday, but many complained that they had been left completely in the dark about its problems.
Unions said the job cuts were "devastating".
The GMB union said it had sought urgent talks with the firm in the past few days but had not been able to gain any information.
It is to ask the Department of Trade and Industry to investigate the company's collapse and the role played by its directors.
Two directors quit the company last month leaving just two executives - headed by non-executive chairman Bill Davies - to run the business.
"The GMB is angry that the management have let the company run down to this point without saying anything," said Graham Coxon, GMB organiser in Lancashire.
"We will be seeking immediate talks with the administrators to see if there are any viable options to save jobs and to get proper compensation for those who have lost jobs."
Production of Tiny and Time computers in Lancashire is to end
Nigel Evans, MP for Ribble Valley in which the company's offices are situated, called for a "full investigation" into the firm's collapse.
"I would like to know who knew how bad it was for the company and why action wasn't taken at any earlier date," he told the BBC.
The company's profitability has been affected by falling PC prices and intense global competition.
According to Grant Thornton, Granville has not filed any accounts since June 2003 when it recorded a £2.5m profit and sales of £207m.
However, it said the company had been making monthly losses of between £1m and £2m since January.
The company is owned by British businessman Tahir Moshan, who resigned as managing director last year.
I work as an independent computer repairer, and fixing Time and Tiny branded computers makes up a large part of my business. Most of them come to me with a support horror story; many of them are still under warranty, but their owners are just sick of being passed from pillar to post by Tiny's 'support'.
Mark Saunders, Bath
It's tragic that we find out from the media about this! Staff were speculating about what was going on but the company management did not have the decency to inform them about what was going on!
Having worked for Time computers, the news came as no surprise. The company was on Watchdog a few times so I thought they would have gone into administration long before now.
Hema, Bromley, Kent
I managed a Tiny showroom in Seattle, until July 2001, when Tiny abruptly closed all its stores in the US. I was one of the lucky few who, as a manager, received his final pay, plus severance. However, none of the hourly commissioned employees received their final month's pay. I hope the UK employees will be more fortunate.
Ivan Smith, Seattle, WA
I ordered a laptop from Tiny three days ago, and am now bracing myself for getting neither computer nor my money back. It's an unfortunate situation, but nothing compared to the hardship of the employees made redundant, already owed a month's salary. They should never have been put in this position.
Nicholas Horne, London
Just been informed that we are not getting paid on Friday at all. We've got to go through the DTI.
Jason Nicholson, Hull
I placed an order for a Home Cinema system on Monday (25th July), I just found out that Tiny has gone bust today, the very same time the money was taken out of my bank. If the union have known about the situation for some days, why didn't they inform the purchasers before an order was placed?
Les Bell, Stavanger, Norway
I work for the Computer Shop which is the retail outlet for the company. We have been left totally in the dark as to what is going on. All the directors have left. We don't know if we are going to get paid or not. We have families to feed and mortgages to pay. If we do not get paid on Friday I don't know what I am going to do.
My husband has worked 6 years for Time Computers, and the last 2 months hasn't been paid on time. I called my husband at work this morning to update him on the situation of what the media was saying and I find it absolutely disgusting that the media knew what was going on before the staff did.
I have been affected by the job losses at Time, I have worked for the company for 5 years and 3 months in total and I was informed of my job loss by text message. I have no idea if I will be able to pay my mortgage on Monday as pay has not been confirmed. My chances of keeping my house are completely shattered.
I worked there for a couple of years and to be honest I thought this would have happened sooner. I feel sorry for all the people who will lose their money as a result of the ineptitude of the management of Time.
Ex Employee, York
I am one of the employees actually in the building. We have not been informed of any such statements about the severity of the situation. Yesterday we were informed of the stores closing for 1-2 days, but was told it was due to a credit card transaction problem and the stores were to put a notice on the windows telling the public that we where having a stock check and it would be business as usual.
Time and Tiny were brands associated with some of cheapest budget computers on the market. Their products regularly got slated in reviews for having many corners cut on their specifications and build quality. This news should really be seen as sign that consumer can no longer be fobbed off with substandard goods and will use the power of they're wallets to prove it.
I was made redundant at the end of March 2004. The problems that Time/Tiny finds itself in now are of no surprise to me as it has been struggling since Christmas 2003/2004 when its sales were not at the expected level.
Speaking as a manager of one of the retail stores, I have not heard any official comment so far and heard about the situation first on a website. We have been kept in the dark the whole way through, I was told to put a sign on the door saying "closed for stock take" and I do not even know if I will get paid on Friday - never mind redundancy.
I purchased a Tiny laptop on the 17th July - the salesperson gave no indication that they were in financial difficulties, maybe he did not know. I have paid £600 for a machine I am unlikely to obtain.
Richard Thomas, Birmingham
After 7 years working with Time we are experiencing one of many problems that has hampered production and customer service in the past - a total lack of communication between management and staff. There has been no news of what is happening - the staff are in the dark and totally demotivated. So much so that any news has come from internet news sites such as yourself. It's a disgrace.
Gary Shaw, Burnley
As a person affected by the demise of Tiny ( I am awaiting delivery of an order paid for on 23rd May 2005) I thought I would check the Tiny website today. Amazingly, at 1.35pm the web site is still accepting credit card orders with no indication of the companies financial troubles.
Steve Wooldridge, UK
I didn't know about the closing of my store until yesterday morning. And many customers have bought PCs but won't get them. They've waited until three days before payday to lay us off, and we still don't know if we are getting paid for it. I hope whoever is responsible will get their comeuppance.
Stuart Keane, United Kingdom
I bought a computer in Nov 2004 from Tiny which gave lots of problems. I had taken Tiny to the Small Claims Court regarding the computer which ultimately completely broke down. They agreed to reimburse me and I sent the computer back last week. They sent a cheque for my court fees but now I have nothing for the costs of the computer.
Brian Hughes, Swansea
After working for Time Computers in 1999-2000 this news come as no surprise to me. The sad thing is that the customers will pay the price for the managements incompetence.
I was one of the first retail employees of the company and was with them for over 5 years. It all started going wrong 4 years ago, when we were seen as too expensive and were replaced by much cheaper staff who did not have the commercial skills to make money.
Dave Watson, Horton Heath, Hants