DRINKS GIANT Diageo told staff in Ireland yesterday that it would seek redundancies in support functions and marketing as a result of a reorganisation of the business across Europe.
It is understood that Diageo is seeking to achieve labour-cost savings of €8 million a year. This could result in more than 70 redundancies in Ireland, where it employs 1,700 staff on the island.
Staff were informed of Diageo's plans at a series of briefings yesterday. Diageo's plan to restructure the business was revealed by The Irish Timesyesterday.
The changes will primarily affect support functions and marketing, and will not impact on Diageo’s manufacturing operations or its Storehouse visitor centre.
Diageo plans to consult with employees on the restructuring, and is expected to offer voluntary redundancies.
In a statement yesterday, John Kennedy, managing director of Diageo Ireland, said the changes were “absolutely essential” to ensure that Diageo continued to have a “competitive and sustainable business” in Ireland.
“Diageo is fully committed to Ireland, and has very significant operations here that are an essential element of our company’s operations globally,” Mr Kennedy said.
“However, we do need to make changes and deliver greater efficiencies in some of the support functions of the business.
“The announcement today is difficult, and we fully appreciate the impact this may have on some of our employees and their families.”
News of the job cuts comes hot on the heels of two significant publicity coups for Diageo in Ireland in recent days. Last week, Queen Elizabeth II and Prince Philip visited the Guinness Storehouse in the St James’s Gate brewery, although they did not sample the pint of plain that was pulled for them.
And on Monday US president Barack Obama and his wife Michelle both supped the famous stout during their visit to Ollie Hayes’s pub in Moneygall, Co Offaly.
The latest decision is shaped by a sharp decline in beer sales in Ireland in recent years due to the recession and other factors. In February Diageo said Ireland was the “key driver” of a 4 per cent net sales decline in beer in Europe in the first half of its trading year. This was attributed to weakness in the “on-trade”, particularly in rural areas.
In 2008, Diageo unveiled plans to build a super-brewery in Kildare as part of a €650 million investment that would have resulted in the Kilkenny and Dundalk breweries closing and some land at St James’s Gate being sold. The plan was put on ice at the start of 2010 due to the recession.
