Redundancies to hit Red Stripe

Within the next two weeks, beer company Red Stripe will complete its consultation with staff, paving the way for making several positions within the company redundant by the end of June.

"We have just announced it to staff, and what we are doing now is the start of the consultation process with our people, and so by the next two weeks, we will firm up what the structure will look like and who will have to go," said Alan Barnes, managing director of Red Stripe.

At the end of the review exercise, all affected employees are to receive redundancy packages, including outplacement support covering career, financial and psychological counselling, as well as overall support in dealing with the loss of employment, Barnes further said in a notice to the press on Friday.

The move comes against the background of what Barnes said was declining business, which recorded a five per cent drop in trading profits at the end of its third quarter in March.

"When we look at the general economic and competitive environ-ment for the coming year and beyond, all indications are that it will continue to be extremely challeng-ing. We have to examine our business model now to stop the performance decline and adjust to deliver long-term business sustaina-bility," said Barnes.

In April last year, Red Stripe also made similar changes to its structure, with two senior management posi-tions, director of marketing and head of corporate relations being made redundant.

Reorganisation

Over the last year, Red Stripe parent company, Diageo Plc, has also been undergoing a reorganisation of its operation. Diageo announced in February last year that it was likely it would be spending as much as £200 million to position for growth in an increasingly uncertain market.

But according to Barnes, the redundancy move is a last resort, one which is regrettable, but a must.

"Any redundancy decision is always regrettable, but I am committed to leading a business that can survive tough times by doing what is right to maintain the long-term viability of the company for all the employees and stakeholders, and that means downsizing our operation to reflect today's business imperatives," he said.

Red Stripe will also assist in vocational training for affected employees who are desirous of developing a new skill.