The Oxford Health Plan facility in Mullingar, Co Westmeath, closed its doors at noon yesterday leaving its 135 workers redundant - 21 months after it opened.

Employees had no warning that the plant was to cease operations until they reported for work yesterday morning when they were met by senior management with the bad news.

"I heard it on the radio and I had to stop the car and get out to catch my breath," said one woman employee as she left the plant weeping.

Earlier, a senior executive from the US, Ms Rita Bourgeois, accompanied by the facility manager, Mr James Murphy, told workers that the plant, which processes claims on behalf of Oxford Health, a US Medicare company, would be closing at noon.

A company statement said Oxford had consolidated its claims processing to reduce administrative costs and achieve economies of scale over the last year.

"As part of that process, and as a result of the decrease in Medicare membership, the company decided to close its Irish operations," said the statement.

"Regretfully, our dedicated work force in Ireland was impacted by the changes in our US business. The action was necessary to achieve continued improvement in our financial performance and in no way reflects on the performance of these employees," the statement added.

It said that the company had worked closely with IDA Ireland to ensure that all employees would receive redundancy compensation and to secure possible alternative leaseholders for the facility.

Oxford would also meet all contractual and financial liabilities in Ireland.

This was confirmed by the IDA's regional manager, Ms Margaret Geaney, who said the company would be paying back monies owed to the development authority.

She said the IDA had continued to work with the company, which was downsizing in the US and had already shut six similar facilities there.

"What is positive is that there is a very good facility there and I am hopeful that this can be filled again," she said.

The Tanaiste, Ms Harney, expressed her disappointment at the closure and revealed she had met the company yesterday.

She said the IDA was actively working with a potential investor to acquire the Mullingar facility for a new international services operation and she was optimistic that these talks would be successfully concluded in the coming weeks.

Mullingar and District Council of Trade Unions said it was saddened and disappointed by the news and condemned the fact that the announcement had not come through the management but the media.

Its spokesman, Mr John McGrath, called on the Tanaiste to revitalise the task force set up after the closure of the Tarkett plant to ensure replacement jobs were brought into town as quickly as possible.

Ms Aine O'Meara, executive director of Mullingar Chamber of Commerce, said there was "absolute disappointment" at the closure of the firm.

She said she was particularly sorry for people who had left jobs to join Oxford and now found themselves unemployed.