Diageo to axe 500 jobs in Scotland

Diageo is to axe 500 jobs in Scotland by closing its sites in Kilmarnock and Port Dundas in Glasgow over the next two years.

The closure of the two sites by the drinks giant will result in 900 job losses but 400 new jobs will be created in Fife through an £86m expansion of a packaging plant. A new £9m coopering centre will also be created in Clackmannashire by summer 2011.

The Shieldhall Packaging Plant in Glasgow would receive a further £3m investment on top of the £15m invested in the plant over recent years. This investment, along with some changes in working practices, would result in the loss of 30 jobs at the site.

Bryan Donaghey, managing director of Diageo Scotland, said: "These decisions have been extremely difficult to take. We have only reached them after an exhaustive review of all the possible alternatives. I am sorry for the impact this announcement will have on our employees and their families in Kilmarnock and Glasgow and the difficulty this will cause in Kilmarnock where we are a major employer.

"We believe the plans announced today will help secure the sustainability of our business in Scotland. As Scotland's largest manufacturing exporter, 85% of our output from Scotland is exported to over 180 markets worldwide. We therefore need to be competitive in a global context and the restructuring announced today is a key part of this.

"Our plans and the associated £100 million investment reflect the strength of Diageo's continued commitment to Scotland. With these changes, Diageo would still employ nearly 4,000 people across the country.

"We will do everything we can to support our employees through this difficult time. We will also work closely with local political and community leaders in Kilmarnock so that together we can seek to address the impact this announcement will have on the town."