Stone's Layoffs

Stone Brewing fired about sixty employees yesterday at its Escondido headquarters.  (The exact number was not released, I have read numbers as low as fifty and as high as seventy five, but the San Diego Union is stating sixty.)   The West Coaster, and other publications, posted the PR statement from new Stone CEO Dominic Engels.  The layoffs were part of corporate restructuring.  In the statement, Engles said:

More recently however, the larger independent craft segment has developed tremendous pressures. Specifically, the onset of greater pressures from Big Beer as a result of their acquisition strategies, and the further proliferation of small, hyper-local breweries has slowed growth.

It is unfortunate that Stone blames both the macro breweries and "hyper-local breweries" and not itself.  Stone has had big, cash-intensive projects in 2015 and 2016 that are just completing, which include full-scale brewing facilities in Virginia and Berlin.  These ambitious growth vehicles had to have been expensive, and are probably not at full revenue yet.  The lag between expenditures and revenue makes sense, and is something Stone should have expected and budgeted.  Stone needs to take some blame in the firings and not just point to external factors.

On a simple level, Stone's CEO is new, and therefore has no emotional history with employees.  Letting him take the blame for the firings under the moniker of "restructuring" is easy.   It is also a weasel move, letting the new guy be the bad guy, and does not reflect well on Greg Koch and Steve Wagner.

Stone is a twenty-year old company.  Upward, vertical growth is not realistic.  A small number of layoffs are not a surprise at this stage of a company's life.   As Engles's statement points out, there are "tremendous pressures" in the craft beer industry.  Stone is in as good as a position as any craft brewer to face competition.  In my opinion, it's the top craft brand, and a trendsetter.  I have written on this blog more than once that if a brewery makes good beer it will fare well, and Stone makes good beer.