UK: Diageo said to be reviewing staff levels in order to make savings of £500 mln

Diageo is said to be reviewing staff levels as it works to make savings of £500 mln, with speculation mounting that jobs may be cut from its London HQ and global operations team, The Drinks Business reported on September 20.

The world’s largest drink producer is currently in the middle of a three year productivity drive to make savings of £500 mln by 2019, cutting overheads with the intention of reinvesting two thirds of the savings into other areas of the business.

Around 1,500 members of staff are currently based at Diageo’s London offices. While some reports have speculated that as many as a quarter of those jobs could be at risk, the number of jobs that could be cut, if at all, has not been confirmed.

When approached by the drinks business, a Diageo spokesperson said: “We announced last year that we would deliver a productivity programme over the three years ending fiscal 2019. This covers all aspects of how we run our business, as we continue to become more efficient and invest behind growth. As you would expect our employees will be the first to hear about any proposed changes to our structure.”

In addition to job cuts at its London headquarters, the Johnnie Walker and Smirnoff maker is also considering reducing its global operations workforce, according to City AM.

Diageo’s profits dropped 6% in 2015/16 amid currency volatility, however a strong performance in the US and growth in Europe means it is on track to deliver on its 2017 growth plans, according to chief executive Ivan Menezes.

Releasing its preliminary end of year results to 30 June earlier this year, Diageo reported net profits of £2.24 billion ($2.94 billion), down by 6% from £2.38 bln a year earlier. Organic net sales grew by 2.8%, although reported net sales declined 3% to £10.4 billion.

20 September, 2016