Recovery experts from Grant Thornton announced the job losses at Granville Technology after deciding the business could not be traded as a going concern.
The 1,500 redundancies will be at the company's head office at Burnley, Lancashire and among staff working at 80 stores nationwide.
A statement from Grant Thornton said the group had fallen victim to continued price deflation in the personal computer market, exacerbated by a softening of consumer demand in recent months, and pressure from suppliers.
It added the current trading situation meant the redundancies were " inevitable".
While the company was profit-making in the year to June 2003, Grant Thornton said it was believed Granville Technology had been suffering losses of up to £2 million a month in the period since January.
There are thought to be more than two million Tiny personal computers and laptops in UK homes as well as thousands of Time computers in schools, colleges and universities.
Granville sells its products through high street stores, called The Computer Shop, as well as through other outlets such as Tesco, Asda and Woolworths.
Grant Thornton said it would maintain the existing customer support operation and that it would set up a helpline to assist customers, including those who have made purchases but not yet received goods.
It is expected that Grant Thornton will make a further announcement later today on how customers will be affected by the news.
Many computers have been sold with warranties, while some deals with schools and colleges are thought to include service contracts.
Granville was formerly known as Time Group and three years ago acquired Tiny Computers out of administration. It generated sales of more than £200 million and profits of £2.5 million in the year to June 2003.
No accounts have been filed since then, but Grant Thornton said management accounts demonstrated losses of between £1 million and £2 million a month.Reuse content