The 31 directly employed staff were given the bad news on Wednesday and have all been made redundant.
The firm is now in the hands of administrator Ernst & Young.
The firm ran into financial difficulties following payment delays on a contract and an adjudication settlement which fell a long way short of its expectations.
The impact on cash flow coupled with a depressed market led to the appointment of Ernst & Young at the £15m turnover business.
Dew Construction was formed in June 2006 following the acquisition by DCT Civil Engineering of the civil engineering and frameworks divisions of Dew Construction Ltd.
The business ran as a separate trading entity, at first servicing a number of long-term contracts, including agreements with the Highways Agency and Coventry City Council.
John Hensman, Business Development Director, said: “Competition in the market has increased and while Dew consistently outperformed its peers on quality, the economic climate, pressure on tender prices and very aggressive contract administration by some clients has meant that this is often not enough.”
DCT employs 101 people between its Oldham and West Lothian offices and will be unaffected by the administration.
The firm provides civil engineering services across a number of sectors, including water, waste, power, highways and development infrastructure.