The tally of layoffs has come in as Republic National Distributing Company (RNDC) winds down operations in California.
RNDC gave notice to 1,756 employees on July 1 to coincide with the company’s withdrawal from the Golden State on September 1. The distributor filed a notification under the Worker Adjustment and Retraining Notification (WARN) Act, which mandates that employers with 100 or more employees must provide at least 60 days’ notice to affected workers before a plant closure or mass layoff.
The layoffs will impact eight locations: 640 in Tustin, 238 in San Bernardino, 226 in Pleasanton, 176 in Los Angeles, 156 in Morgan Hill, 136 in West Sacramento, 104 in Hayward and 80 in San Diego. Eliminated roles range from sales, human resources, business analysis to warehouse drivers, and include union-represented jobs, according to paperwork filed by RNDC.
The withdrawal followed a supplier exodus from RNDC, whose former CEO, Nick Mehall, departed the company in February after Brown-Forman and Tito’s Handmade Vodka, the country’s top-selling spirit brand, announced their departures in California. Brown-Forman later announced a national departure.
Gallo-owned High Noon, the top-selling spirits-based RTD, also left the distributor’s operations in California this year. The loss of major suppliers in the country’s largest spirits market previously caused layoffs for RNDC, with at least 60 California employees let go in March, coinciding with Tito’s exit on April 1.
Earlier this year, the distributor said that it is “facing tighter margins, higher costs and shifting consumer preferences,” in a statement. Rising operational costs, industry headwinds, and supplier changes, were cited by CEO Bob Hendrickson in a more recent statement about the company’s final push to exit the state.
The distributor’s departure has left more than 2,000 wine and spirit brands scrambling for new wholesalers. Several major spirits groups have announced a new distribution home with Reyes Beverage Group.
With losses in California, RNDC pivoted to shore up its business in another leading spirits market by announcing a “strategic reinvestment” in its Texas operations on May 13 by adding more than 100 new roles, with a focus on the on-premise. The company had reportedly laid off a number of positions in Texas earlier this year.
RNDC’s recent efforts in the Lone Star State could have been a reaction to Johnson Brothers announcing its entry into the Texas market through acquisition of the Texas, Arizona, Colorado, and Florida departments of Maverick Beverage Company in April. It’s unclear if the loss of a major supplier in the state (Brown-Forman) could derail RNDC’s plans to reinvest, but Texas job postings, as well as roles in other states, are still active.
Strauss Borrelli PLLC, a class action law firm, has opened an investigation regarding whether RNDC violated the WARN ACT by failing to provide at least 60 days’ notice before laying off employees at multiple facilities.
Learn More: Deep Diving California’s Distribution Shakeup and the RNDC Fallout