Lakeland Dairies is to cut 68 jobs at its Coolshannagh site in Monaghan.
It is understood that butter processing will be transferred to another site considered more efficient by the management, while yoghurt production will cease completely at the plant.
It is understood that the liquid milk processing, milk intake and agri trading businesses will remain at the Monaghan site.
In a statement issued on Friday afternoon, Lakeland said that prior to the merger of LacPatrick and Lakeland, the Monaghan site, as part of the LacPatrick Dairies business, had “significant and recurring losses”.
“The site has had little or no investment in processing capabilities over the years,” Lakeland said.
There had been fears that Lakeland would cease all operations at Monaghan.
Lakeland Dairies CEO Michael Hanley said: “It is essential for us to realise efficiencies from within our merged group of processing facilities and to achieve sustainable profitability in the interests of our farm families on a long-term basis for the future.
“After careful consideration, the board has approved this plan for the Monaghan town site, which will reduce operating costs while providing for the continuation of strategic units for the business.”
Hanley added: “Arising from this adjustment of operations, it is regrettably the case that a number of redundancies will be required in Monaghan and we will enter into consultation to discuss the roles that will be affected.
"We will also be providing details of any redeployment opportunities available in other parts of the Lakeland group.
“Of the 130 jobs in Monaghan, there will be some 68 redundancies on the site, while some will be redeployed elsewhere within the Lakeland group.”
The merger between Lakeland Dairies Co-operative Society Limited and LacPatrick Co-operative Society Limited was formally completed in April this year.
It made Lakeland Dairies the second-largest dairy processor on the island of Ireland, with a cross-border milk pool of 1.8bn litres.
At the time, then-Lakeland CEO Hanley said that “significant work” would have to take place to make the new organisation “as efficient as possible” and to return the strongest possible milk price back to dairy farmers in line with market conditions.
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