Cadbury yesterday announced the proposed job cuts and multimillion investment at its Dunedin plant over the next two and a-half years which would allow it to boost production by 25%.
The proposed job losses brings the total number of redundancies announced around the city during the past four months to 845.
Ten weeks ago, Cadbury gave assurances it was not considering restructuring in Dunedin and when contacted at the time dismissed rumours of job losses as "only speculation".
Yesterday, Cadbury called in security staff and later banned Dunedin workers from talking to the media after the 3.30pm announcement.
Most workers leaving the premises yesterday declined to talk to the media, with some directing inquiries to the company's corporate affairs centre.
Several workers said clauses in their employment contract prohibited them talking to the media.
The Dunedin factory employs 700 workers, increasing to 800 at the height of the production season.
The planned job losses will occur as new high-technology high-production machinery is progressively installed over the next two years.
Cadbury managing director of confectionery in Australia and New Zealand Mark Callaghan announced an overall $153 million investment package for Dunedin and two Australian sites, which he described as new "centres of excellence" in their respective confectionery specialties.
The changes for Cadbury would "drive profitable growth" and deliver "margin improvements" and help secure future manufacturing by Cadbury at the three sites, Mr Callaghan said.
There will be $61 million invested at Claremont, in Tasmania, at a cost of 160 jobs, and $22 million at Ringwood, in Victoria, at a cost of 25 jobs.
Otago-Southland Employers Association chief executive Duncan Simpson said the announcement sounded like more good news than bad.
"This is part of a strategic review of all their operations in this part of the world. Plants in Dunedin, Melbourne and Hobart are to become centres for excellence.
"Down here, it is for manufacturing assortments. With this kind of investment over this sort of time-frame, the job losses may be managed through attrition rather than a big bang."
The company's $51 million investment was in addition to $25 million already committed to the Dunedin crumb plant.
That investment made Mr Simpson feel more comfortable about the long-term future of Cadbury Confectionery in the city.
Otago Chamber of Commerce and Industry chief executive John Christie said the job losses were substantial and came on top of a "bad year" for redundancies in the city.
"Our sympathy has to be with the staff who might be made redundant. When this happens, people are unsettled during this difficult time."
However, the strategic decision by Cadbury made good business sense as it prepared for the future.
The latest chamber survey showed how tough it was to do business in New Zealand, and around the world, with profitability being hit hard.
Dunedin City Council economic development manager Peter Harris said it was hard to stay positive about the investment when so many people were going to suffer through job losses.
The long period for the cuts would allow people to search for other options, but it was a sad day for Dunedin.
Cadbury spokesman Daniel Ellis said from Melbourne the proposal to make the Dunedin staff redundant would go into a three to four-week consultation stage, with a final decision likely by mid to late September.
He was unable to confirm how much Cadbury set aside for the potential Dunedin redundancies, but said if they were to go ahead the company "would stand by its commitments and the [staff] entitlements were assured", plus counselling and career planning.
Service and Foodworkers southern regional secretary Campbell Duignan said the news had come as a shock, even though job losses had been hinted at previously.
"We got very late notice of the meeting and it was a bit of a shock to see how they chose to announce it in a simultaneous video cast. Our guys were surprised by the approach."
The union would be involved in the consultation process and would work hard to minimise job losses where possible.
Mr Duignan would contact his Australian counterparts to seek their support in the consultation and negotiations.
"It's a two-edged sword. On one hand they are announcing extra capital expenditure and on another job losses. That will mean less regular money going into the community, which will be devastating in terms of the Dunedin community," he said.
Engineering, Printing and Manufacturing union organiser Mike Kirwood would meet company representatives today to discuss the next steps in the consultation process.
