ISG, which has recently been involved in numerous government projects, including work to prisons, went into administration in the UK on September 20.
Following the announcement, administrators said that the majority of its 2,400 employees have been made redundant and shut down its sites immediately.
Around 200 staff are expected to be initially kept on helping the administrators wind down the business.
The company has a base in Sandyhill Lane and was involved in the £65 million project to build Suffolk One in 2010.
Ruman Muhith, Labour councillor for Priory Heath, expressed his sadness after working at the company for two years as a global IT service desk manager between 2013 and 2015.
He said : “My former Ipswich colleagues, some of whom have been with the company since the old Jackson Construction days, were local people dedicated to their craft with decades of experience.
“I was deeply saddened to hear of their job losses following ISG’s administration. While the personal impact on each individual may vary, it is clear that losing one’s job in the current economic climate, amidst a challenging job market and ongoing cost of living pressures, is distressing.
“The sudden nature of the collapse must have come as a shock, and I hope my former colleagues, who are highly skilled professionals, from IT specialists to project managers, quantity surveyors, and more, quickly find new opportunities.
“They deserve a swift return to meaningful work, and I remain hopeful for their futures.”
Although the construction services company had made efforts to find a buyer according to EY a potential buyer “could not, despite repeated requests of them to do so, adequately demonstrate that they had the funding needed to recapitalise the business and keep it solvent.”
They added “Due to current market conditions, an alternative sale or additional funding could not be secured.”
According to Data Analyst ABI ISG is involved in 69 central government projects totalling over £1 billion.
They are involved in 22 projects for The Ministry of Justice including the £300 million extension to the Grendon and Springhill prisons in Buckinghamshire and £155 million worth of work to expand prisons in other areas.
Barbour ABI’s chief analyst Ed Griffiths said the live projects the company were involved in were only “just the tip of the iceberg” adding “The ripple effect will be extremely worrying for the hundreds of subcontractors involved.”
A spokesperson for the Government said: “We have implemented our detailed contingency plans and affected departments are working to ensure sites are safe and secure.”
ISG in Ipswich declined to comment.