DUBLIN, Ireland — Guinness beer owner Diageo PLC rattled an Irish icon Friday, announcing plans to lay off more than half of its brewery workers, close two breweries and shift most production to a new, high-tech plant in the Dublin suburbs by 2013.
The British beveragemaker decided not to close the landmark Guinness brewery in Dublin, one of the city's oldest businesses and a top tourist attraction, after concluding that would do too much damage to its brand image and customer sentiment.
Diageo expects to lay off about 250 people, or 58 percent of its current brewery work force in Ireland, over the next five years. Brewing staff at the Guinness brewery at St. James' Gate in west Dublin will be slashed to 65 from 230.
David Gosnell, Diageo's managing director of global supply, said the move to a new suburban mega-brewery was necessary to compete with the rise of lower-cost breweries in Eastern Europe, Russia and China.
"The business is hugely competitive. … Smaller breweries are consolidating and closing in Western Europe," Gosnell said.
The new plant is expected to employ about 100 people, many of whom could come from the current Guinness brewery.
Two other breweries employing more than 170 in Dundalk, north of Dublin, and Kilkenny to the south would close by 2013. Few of those workers are expected to relocate. Those breweries produce many other beer brands, but not Guinness.
Government and business leaders welcomed Diageo's plans as a major new investment in Ireland.
But union chiefs and opposition lawmakers said the company is being greedy and taking Ireland's drinking public for granted.
Deputy Prime Minister Mary Coughlan said Diageo is planning "a major investment that secures the future of brewing in Ireland." She said the five-year scale would give workers facing layoffs plenty of time to retrain and look elsewhere.
"People were expecting change, but the actual announcement has shocked people," said Sean Mackell, general secretary of the Guinness Workers Union. Diageo was "already making huge profits in Ireland," he said, vowing to extract maximum payoffs.