Car dealership Holiways has gone into administration and most of the company's 81 staff are set to be made redundant.
The new and used car dealer - which had sites in Newton Aycliffe and Bishop Auckland - had suffered a drop in trade as a result of reduced consumer spending.
And this is despite the company selling its Durham and Hartlepool dealerships in recent weeks.
KPMG have been appointed administrators .
"It is unsurprising that during a recession, a relatively rural car retailer has struggled. Despite a restructure, which saw Holiways sell two dealerships in recent weeks, the siginificant losses incurred by the business through the summer means it simply couldn't continue to trade."
More top news
Northumberland has won Silver in the Best UK Holiday Destination/County in the prestigious 2015 British Travel awards last night.
Police from five forces have carried out raids today aimed at stopping an escalating feud in the travelling community.
Newcastle United supporters have the highest number of active banning orders in the Premier League.