There was a grim mood as stunned workers at Black and Decker were given the devastating news.
The factory's general manager Barry Bloomer broke the news to workers, who began the shift this morning and the first redundancies are expected in the next two weeks.
The first to be affected will be workers on the cordless power tools manufacturing section with others to follow over the next few months.
Bishop Auckland MP Derek Foster tried his best to console workers yesterday by trying to reassure them that everyone was working together to try to find new jobs for the beleaguered workforce.
He said: "This is a body blow for Spennymoor, only a few years ago this factory employed 2,300 people and there was optimism we were going places.
"That is a measure of the turnaround today. Three months ago a task force was set up and discussions have helped save 450 jobs here. At least that is something to be grateful for.
"Now we have to try to focus that energy on trying to get those who have lost their jobs more work.
"It is very difficult to compete with low labour costs of eastern Europe and the Far East. What we have to do is try to market this site, the skill of its workforce and a higher value product to try and bring more work here. But it is going to be very difficult."
The head of regeneration for Sedgefield Borough Council, Bill Waters, said: "This is absolutely devastating for the people of Spennymoor. We didn't know anything about it until Monday.
"We had heard rumopurs and there is no smoke without fire. But we never thought there would be so many jobs lost as has been announced today."
Leader of Sedgefield Borough Council Brian Stephens added: "The news is very grim indeed for the workers here in terms of the commitment they have with their famililes, mortgages and so on.
"But it is also of grave concern to the area. In this region we are losing around 1,000 jobs per year in the manufacturing industries and it is increasingly dificult to replace these jobs.
"We just can't compete with the cheap labour market. What we need is the government to really start to take a look at this problem and address the job losses in this industry to prevent it continuing in the future."
One worker, David Pick, 40, a married father-of-one young child, has worked at the plant five years.
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