Management at the troubled Glasgow venue called in receivers last week after the nightclub was forced to close its doors.
Derek Forsyth, of accountancy firm Campbell Dallas, said that a small number of staff would be kept on to help with the administration.
He added: “It is with great regret that we have had no option but to make 129 members of staff redundant with immediate effect.
“We will work with relevant agencies to provide as much support to the affected staff as is possible.”
Arches bosses revealed that they had been left with no other option other than to close the venue after licensing chiefs ordered the nightspot to close at midnight.
The move came after a number of police complaints about drug use and disorder at the venue.
Mr Forsyth added: “The Arches was facing unsustainable cashflow problems and despite an immense effort by the board and funding partners, it was clear that administration was the only option for the companies.
“As a result of an uncertain future income profile, the venue will immediately close. We have already contacted various funding partners and stakeholders to consider all options going forward and to see whether elements of the business may be resurrected.
“The Arches is an internationally-recognised brand and we would encourage interested parties to make contact as soon as possible.”
Close to 40,000 people signed a petition backing the reinstatement of the venue’s license, while the likes of Franz Ferdinand and author Irvine Welsh added their names to an open letter pressing the government and creative organisations to help ensure the Arches remains as an arts venue.
Licensing issues were raised last year by police following the drug-related death of Regane MacColl, 17, as well as a number of other incidents.