Dairygold Co-operative is to cut up to 500 jobs by Christmas.
Staff at the Cork-based operation were told in a newsletter today that if the financial problems at the company could not be fixed and costs could be cut, the options were "stark".
"The problems and challenges facing Dairygold must be addressed withoutdelay and everybody in the business, at all levels, must enthusiasticallyplay his or her part to put the business firmly back on the road torecovery," it said. "We must look to the future and 'fix' the business."
The company is seeking voluntary redundancies. However, involuntary job cuts will begin by December 17th if the uptake is insufficient. Dairygold has been in restructuring negotiations with staff since last September.
A spokesman for the company said today's news had not come as a surprise to staff.
In a newsletter distributed today, workers at Dairygold were given the background to the reasons for the redundancies, details of a severance package and a breakdown of what areas of the organisation the job cuts will apply to.
As part of the programme, transport services will be outsourced and there will be "appropriate cost reduction" at all levels right across the business, the newsletter said. "This is absolutely essential for Dairygold's survival.
"Faced with 2002 losses and projected accumulating losses over the next few years unless cost reduction undertaken, Dairygold is moving to 'right-size' its business for the market in which it must now operate."
The company publication said "full and fair" redundancy terms for people who will be leaving the business have been agreed in negotiation between the Joint Negotiation Forum (JNF), under the chairmanship of Mr John Horgan, former Labour Court Chairman. The package represents the "best possible deal" the society can offer now or in the future.
The Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney, has been formally notified of the planned redundancies.
Dairygold now intends to concentrate on milk processing and consumer foods. The group reported an 80 per cent drop in profits last year, from €25.2 million in 2001 to €4.8 million. Its pre-tax profit dropped to €2.71 million from €13.25 million in the same year. The chief executive of Dairygold, Mr Jerry Henchy announced he planned to close 23 of the company's trading branches soon after he took over earlier this year.
In September, Dairygold announced it was selling the Charleville plant to Dawn Meats for an undisclosed sum, as part of its strategy to exit a sector in which it was losing money. In a related disposal, Dairygold also sold the boning plant in Kilbeggan, Co Westmeath, to Dungannon Meats, a Northern company.
The Green Party TD for Cork South Central, Mr Dan Boyle TD, said he was shocked at the job losses.
"This is a devastating blow to the workers and their families coming as it does just before Christmas," he said. "It is now clear that current Government policies are failing to stem the increasing tide of job losses in Irish industry."