The company filed for bankruptcy in 2002. Employees knew it was a matter of time before more jobs would be cut.
"I know it's sad we're losing our jobs, but we knew something like this was going to happen," employee Cynthia Walden said.
The polyester yarn manufacturer is closing its Greensboro plant and cutting its Fuquay-Varina workforce by a little less than half. It said a downturn in customer demand has left both plants under-utilized.
"It's obviously something we're disappointed to hear, but I have a tendency to want to focus on the positive," said town manager Andy Hedrick. "And that is that they chose to keep 175 jobs."
Town leaders said the impact of the closing will probably have the biggest effect on commercial retailers.
"The most immediate impact will be to those retailers and merchants where employees spent their money -- convenience stores, lunch," Hedrick said.
The final day for laid-off employees is June 18.
The company said it will give those who stay through to that date a bonus. It has also pledged to help employees hold onto their health insurance and find other jobs.
Not counting the Guilford Mills layoffs, more than 3,000 textile employees have lost their jobs this year from layoffs or closings. That's almost as many textile job losses in all of 2004. In 2003, nearly 15,000 people were out of work, mainly when Pillowtex shut its doors.
Since 1987, more than 100,000 people lost work in North Carolina's textile industry.