Staff had been warned a drop-off in boat orders could force the hand of managing director Steve McLay sooner rather than later.
The five labourers were advised on Monday and will finish work at the end of the month.
When contacted yesterday, Mr McLay said he had told the redundant staff they could be needed later this year, when the big summer orders usually come in.
He said the entire boat-building industry was "in a real mess right now" and there was no guarantee it would pick up any time soon.
"After all, we manufacture a luxury item and those are getting hit at the moment."
Mr McLay, who started his company 29 years ago, said he had done his best to keep every staff member employed.
All were loyal and many had worked there for many years and the staff were more like a family than just workers.
"That's what makes this [the layoffs] so hard," he said.
The redundancies were not unexpected.
Staff had been warned some time ago the outlook was not good for this year.
"We were well aware of the lack of work coming in, so I guess it was not a big surprise, but that doesn't make it any easier."
The rest of the staff may also face cutbacks.
There was a possibility full-time staff could work 30-hour weeks at some stage.
"[Introducing 30 hours a week] is something we will review week by week. It's not confirmed yet," Mr McLay said.
Staff were aware the busy summer period was almost over and boat orders tended to dry up for a time.
Mr McLay said it would have been "irresponsible" not to have laid off those staff now.
"We intend to be here this time next year and we had to do something to keep the company afloat.
"You just have to do your best to still be in there," he said.
Other boat manufacturers were letting skilled staff go and Mr McLay said his company was one of the last nationwide to initiate cutbacks.
The Milton company employs 22 full-time staff and three part-timers.
In December 2006, it relocated from its two separate and cramped workshops on the town's main street to a new 3600sq m workshop on a 2.5ha site at the northern outskirts of town.
