The company said that the cut backs will mean that up to four of its dairy sites may be closed. The decision follows a meeting last weekend of over 2,000 farmers shareholders who voted in favour of restructuring.
The company's chief executive Jerry Henchy said that without these cutback it is likely that Dairygold would make heavy loses in the next few years. He estimated that the dairy division could lose over €26 million by 2007.
The news of the job cuts are not a surprise however. Earlier in the year the company warned trade unions thst job cuts may be in the cards for the UK co-op. Back in January this year the company said that financial losses in the previous year meant that it was likely that the group could struggle in the future. In January the company said that job cuts were "absolutely essential for Dairygold's survival".
In 2002 the company made a loss of €3.4 million and its operating profits dropped by 80 per cent. Spectators claim that it is a combination of these financial pressures tat have forced the group to move into a regime of restructuring.
Industry observers have pointed the finger at falling milk prices for Dairygold's weak performance. They claim that Iris dairy industry has been over reliant on EU intervention. The withdrawal of this intervention has led many in the industry to predict that the sector will suffer in the coming years.
In the last six months Dairygold has axed over 1,000 jobs. It is estimated that in the region of 1,500 jobs may be lost in order for the company to survive. The group will announce further details of restructuring within three weeks.
"We must look to the future and fix the business if there are any areas which we cannot fix, the options are stark. It's either fix it. Outsource it. Shut it or sell it", the company said earlier in the year.