Waterford Wedgwood will shed a third of its Irish workforce and close its Dungarvan factory as part of a radical restructuring aimed at reversing the company's fortunes.
The job cuts will see 1,800 redundancies across the group.
A total of 485 employees will lose their jobs in Co Waterford, 375 at Dungarvan and 110 at the company's sole remaining crystal production plant at Kilbarry.
The recently-acquired Royal Doulton ceramics unit in Britain is shedding 950 jobs, 160 jobs are going at the Rosenthal division in Germany and a further 200 across other operations.
The company, which owns some of the world's best known brands, including Waterford Crystal, Royal Doulton and Wedgwood marque has been struggling in recent years as tastes and fashion changed. Chief executive Redmond O'Donoghue described the move as a "simple economic fact of life. We cannot afford to have two plants that are running at 70 per cent of capacity."
Confirmation of the Waterford job losses came as it emerged late last night that technology giant IBM is to shed 13,000 jobs worldwide, mainly in its European operations. The firm employs 3,700 people in the Republic, most of them at a technology campus in Mulhuddart, Co Dublin. But last night a spokesman was unable to comment on how the US multinational's Irish operations would be affected by the restructuring which was first mooted in January. He was also unable to say when the situation would be clarified.
Analysts said the Waterford Wedgwood restructuring was the most radical yet at a company that has undergone a series of such exercises in the past few years.
"This is the last throw of the dice," said Stuart Draper of Dolmen Stockbrokers. "If it doesn't work, things for Waterford Wedgwood will be particularly serious."
Angry Dungarvan workers, who were told the news at a meeting in a local hotel yesterday blamed management for the plant's closure and vowed to fight for a substantial payoff. Unions and management meet today to discuss the redundancy package.
The Dungarvan plant will close at the end of the summer and its manufacturing capacity will be transferred to the Waterford plant. Up to one-quarter of Waterford production will be outsourced to Germany and other European states, a spokesman said.
Mr O'Donoghue said the company would be investing around €6 million in the Kilbarry plant to "underpin the nearly 1,000 jobs there and see crystal manufacture stay in Waterford". He said the restructuring was designed to return the company to profitability at current sales levels and current adverse exchange rates. "Our challenge is how to make money on sales of €800 million," he said.
Waterford Wedgwood made an operating loss of €14.8 million in the year to March 2004 on sales of €832 million, the most recent for which full figures have been reported.
Last March, the company issued a profit warning, saying sales had fallen further this year.
Shareholders are being asked to fund the €90 million redundancy programme through a €100 million rights issue, details of which were also announced yesterday.
Last night the company had market capitalisation of almost €133 million, having jumped almost 37 per cent following the company announcement.
Company chairman Sir Anthony O'Reilly and his brother-in-law Peter Goulandris have agreed to underwrite the entire issue. The two men currently control 24.6 per cent of the company's stock.