Diageo plans to close its production plant near Baltimore by June, with 97 people expected to be laid off. The Guinness maker said the neighboring brewery and restaurant will remain open. In total, the complex currently employs about 200 people.
Diageo said it had made a “difficult decision” after analyzing its “environmental impact”. “To ensure Diageo’s long-term sustainable growth, we are optimizing our existing operations across North America to meet changing consumer preferences,” the company said in a statement.
Diageo opened the plant in 2018, the company’s first new brewery in the United States since 1954. The closure is the latest move by food and beverage companies to optimize operations.
Amid inflation and ongoing supply chain challenges, food and beverage companies are actively looking for ways to cut costs and increase profits. Diageo, the maker of Johnnie Walker, Baileys and Smirnoff, is no exception.
After the opening of the plant, Diageo stated that the Guinness plant gave them a deeper foothold in the US market and more flexibility to develop, test and market their beer directly to the American consumer. With the closure of the plant, the alcohol producer is prioritizing efficiency improvements across its entire network.
“These decisions are not taken lightly and we recognize the impact on our employees,” Diageo said in a statement.
The brewery is best known for producing Baltimore Blonde beer, which the company will continue to brew at other plants.
Several other companies in the United States have announced layoffs and closures at various facilities, joining a broader trend taking place in other business sectors across the country.
Last month, Tyson Foods announced the closure of its poultry processing, broiler and hatchery facilities in Glen Allen, Virginia, and Van Buren, Arkansas, which will result in the layoff of approximately 1,700 employees.
Spice and flavor maker McCormick & Co. also said this year that it was cutting jobs as part of its efforts to save $75 million in 2023. And Coca-Cola announced in November that it plans to restructure its North American workforce through a “voluntary separation program” that will include employee buyouts.