Why Scotch whisky distillery job cuts so difficult for island

His tone contrasted with that of many corporate leaders I have interviewed over the years who seem to simply not think about, or worse not care about, people as they talk about things having to be done for “the business”. Of course, many business leaders I have spoken to thankfully do grasp the fact that “the business” would not exist as an entity without the people in it.

My conversation with Mr MacEachran left me in no doubt that the Isle of Harris Distillery management team is acutely aware of the profound effects of the decision that has been made about redundancies on the workforce.

This was no surprise to me, given a clear founding purpose of the distillery was to provide sustainable employment for a fragile island community and also my past conversations with management.

The distillery’s current workforce of 45 is significantly higher than what was envisioned would be possible over the years in which those behind it worked to turn the dream of creating it into a reality.

All of this will probably not be of much comfort to those affected by the redundancy process.

And there is no doubt that it is lamentable that the chill being faced by the broader Scotch whisky industry, which had for so long enjoyed such good times, has affected Isle of Harris Distillery’s business in a way which has led management to see no alternative but to make job cuts.

I covered the Isle of Harris Distillery story for years before the venture opened in 2015 - including the vision and fundraising - and have continued to write about it ever since.

In conversations with managing director Simon Erlanger over that long period, his passion over the creation of the distillery and crucially the employment on the island it has enabled has come across strongly.

A visit to the distillery in the autumn of 2017, during which I interviewed Mr Erlanger and spoke to some of the employees, reinforced in my mind just how important the jobs created by the distillery are to the island community.

Read more

• Future jobs hope for island whisky distillery hit by redundancies
• 'It is without doubt the saddest day in the distillery's young life'
• Ian McConnell: A landmark moment but such a sad Scottish story
• Ian McConnell: Scotland defies downbeat narrative

I was, in any case, well aware of this, from covering remote and island communities a long number of years ago when working for The Oban Times, and from having in my role at The Herald written about many businesses operating in areas where labour markets are fragile.

Isle of Harris Distillery has enjoyed many successes over the years. Its gin not only provided crucial cash flow while the distillery waited for its single malt Scotch whisky, The Hearach, to be ready, but also won many awards. Many people will be familiar with the distinctive Isle of Harris gin bottle.

The Hearach, named after the Gaelic word for a native of Harris, was launched in autumn 2023.

In summer 2023, just ahead of the launch, Mr Erlanger told me: “We talk about this as being the end of the beginning. We now go into a different momentum, a different era. In a way, we have gone through a lot of growing pains [with] a very inexperienced team.

“We have 45 local people now, which is double what we said we would deliver.”

Mr MacEachran noted then that one-third of this workforce was under 30.

The distillery, which is owned by private investors, has worked hard on forming lasting bonds with its customer base. And many of its customers have been inspired to travel to Harris as a result.

Mr Erlanger last week described the planned redundancies as “deeply regrettable”, characterising the decision as “a move to safeguard the future” of the business.

He said: “We are introducing a restructuring programme which will see reduced production and workforce at the distillery.  

“Much like our colleagues in the wider spirits industry, we are facing challenging headwinds which have led to some incredibly difficult decisions. Following a number of cost-cutting measures, voluntary redundancy is being offered to staff in the first instance, with compulsory to follow thereafter if we do not fulfil our cost reduction target. It is deeply regrettable we find ourselves in this situation and would like to take the opportunity to thank our entire team, particularly those affected by the changes, for their dedication and contribution to the business.”

Mr MacEachran told The Herald last week that the business was now having to move from two shifts to one shift a day in its distillation. 

Read more

• Scotland outperforms UK, latest figures reveal
• Major acquisition of key Scottish aerospace site unveiled, job plans revealed
• Ian McConnell: Glasgow Airport chief flags Edinburgh lure as he bids to regain share
• Scottish airport boss reveals talks with Emirates on flights and new route plans

He said: “We have taken the desperately sad decision to reduce our cost base further. It is without doubt the saddest day in the distillery's young life. It is essential to allow us to navigate through these difficult times."

Mr MacEachran emphasised that every effort had been made to avoid job losses, with other expenditure such as advertising and promotion cut and capital spending deferred.

He said of the job cuts: "We have where we can reduced other costs. This is the very last area. We have tried to avoid it. It is now essential."

Mr MacEachran highlighted the distillery’s conclusion that the challenges being faced were not viewed as “very short term”, and appeared at pains to point out that the decision to cut jobs would not have been taken if they had been seen that way,

Mr Erlanger said: “We remain true to our founding purpose as a sustainable, multi-generational firm built to support the community for many years to come. The regrettable measures now being taken are necessary to help fulfil that long-term vision.” 

The distillery has declined to specify the number of redundancies being sought while discussions with staff are ongoing.

Asked last week if he had any idea at this stage whether there would be enough volunteers to avoid compulsory redundancies, Mr MacEachran replied: "We have to wait and see. I have no understanding of that at this point."

He emphasised not only the recent efforts to try to avoid job losses but also the broader context.

Mr MacEachran said: “What we have seen across the industry in recent months are significant reductions in A and P (advertising and promotion) expenditure, headcount reductions, some of them very significant, slowing down of distillation or mothballing of distilleries."

While noting the challenges were expected to persist over the medium term, Mr MacEachran expressed hopes that, when the market conditions improved, the distillery might be able to increase the size of its workforce again.

This came across as a passionately held wish.

It is important to be realistic and bear in mind the emphasis from management of the enduring nature of the challenges currently being faced.

And the scale of the impact of these challenges on the distillery and crucially its workforce must be recognised.

However, when this difficult chapter comes to an end, we must hope there will be better times again for the distillery, its workforce and the Harris community.