Hawick Cashmere dismissed 11 employees and stressed it as part of long term investment plan in future.
Company also announced purchase of six whole garment knitting machines, worth £700,000.
To lose job before four weeks of Christmas is disappointing for anyone but Deputy Chairman Jim Thomson has assured that this move is vital to secure the future of Hawick Cashmere, Provost Kenny McCartney said.
He was concerned about the 11 people who have lost their jobs and is planning to seek support from Scottish Borders Enterprise.
Hawick Cashmere is trying to become authentic global Scottish luxury brand, manufactured here in Scotland.
Company now has 10 company stores and two franchise stores and is planning for further expansion.