There is growing discontent among the 2,500 workers at Fruit of the Loom, with SIPTU pressing group chief operations officer Mr Bill Farley to clarify whether they can expect an announcement on expected job losses before Christmas. Up to 700 jobs are under threat.

A group of workers placed a picket outside of the Milford factory in Donegal yesterday, angered by the laying off of up to 20 workers and the placing of 300 workers on a shorter-than-expected working week from Monday. The 20 workers were employed in a printing division, but the company has indicated it is seeking to redeploy them.

The return to short-term working was announced in September but around 300 staff at the Raphoe and Malin plants learned this week that their working week was to be reduced to two days instead of three. A further 800 are facing into a period of a three-day working week with the remaining 1,100 or so still working full time.

A Fruit of the Loom spokesman said the introduction of the two-day week was part of the company's continuing efforts to achieve a situation where all workers would return to full-time working on January 1st. Meanwhile top level discussions have resumed between IDA Ireland officials and Mr Farley on the expected loss of up to 700 jobs in Donegal. Earlier negotiations broke down in acrimonious circumstances, but the current talks are described as very cordial.

There seems little doubt that 700 jobs will be cut at Fruit of the Loom with the uncertainty now focused on the timing of that announcement. As Christmas approaches, some sources have indicated the company will either announce its decision shortly, or wait until the new year in deference to the workers' individual circumstances.

Mr Farley and his senior European management team are constantly reviewing the trading situation in the European market with a view to taking a final decision on any job losses.

The company is expected to close its Tshirt manufacturing operations in Ireland, transferring it to its sister company in Morocco. This would lead to the closure of factories at Malin Head, Milford and Raphoe.

The Fruit of the Loom corporation has reported a much improved trading situation globally, with sales and profits in the third quarter of 1998 ahead of the previous year. Much of this improvement is due to the aggressive cost-cutting measures implemented throughout the group.

The company reported sales of $593.7 million (£395.8 million) for the three months to the end of September last. Inventory levels were also reduced with Mr Farley forecasting further reductions by year-end.

Mr Farley has stated that Fruit of the Loom will continue to aggressively reduce costs.

It has been under pressure in the European market, which is supplied by T-shirts and leisure-wear manufactured in Ireland and Morocco. The return to short-term working in Donegal is part of the group's strategy to reduce its inventories in Europe.

Manufacturing costs are substantially lower in Morocco than in Donegal and the company is now preparing to move the low-margin T-shirt production there in a bid to further reduce its European cost base.