Alcohol giant lays off 1,750 workers after quitting California
The job cuts come as the Texas-based company plans to shutter its distribution operations in California by September 2. It's the latest warning sign for an industry struggling with closures and job losses as Americans increasingly cut back on alcohol.
There are reportedly three main reasons for the statewide departure: increasing debt, sky-high costs, and a loss of important contracts to competitors. Republic National has not suggested that politics played a role in its decision, but it is re-investing in Texas with 100 new jobs.
President and CEO Bob Hendrickson said: 'This decision is driven by rising operational costs, industry headwinds, and supplier changes that made the market unsustainable.' He added the company is 'using this moment to sharpen our focus and reinvest in the markets where we're best positioned to grow.'
California remains a conundrum for business leaders. It makes more money than any other US market and is the fourth-largest economy in the world — but also one of the most expensive places to do business, with high gas, rent, and labor costs.
Republic acquired Young's Market, a distributor with a complex web of local hubs, in 2022. But insiders weren't impressed with the company's management. 'They started focusing on numbers instead of customer satisfaction and that's what drove them to their fall,' an anonymous California-based worker told specialist outlet VinePair.
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