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Diageo, producer of Smirnoff and Baileys, announces restructuring and does not rule out possible job losses
Diageo, producer of Smirnoff and Baileys, announces restructuring and does not rule out possible job
About this update from Diageo Plc
Copyright © BusinessAMBE 2023Key takeawaysCEO Dave Lewis is restructuring Diageo to cut costs and increase flexibility.Management is flattening the hierarchy to give local decision-makers more say.Falling revenue in North America is making these strategic course changes necessary.Under the leadership of CEO Dave Lewis, Diageo, producer of Smirnoff and Baileys, is announcing a broad restructuring and is not ruling out possible job losses. The company wants to reduce costs and make its organisation more flexible. In doing so, Diageo aims to strengthen its competitiveness and maintain a stable return for shareholders.Cost‑cutting measures As part of the strategy, the executive committee has been given cost‑saving targets by the CEO, according to two anonymous sources cited by The Financial Times. The company has not yet announced an exact number of redundancies. Internal reports indicate that roles without a direct contribution to revenue are particularly under pressure. According to the same sources, the uncertainty is creating a tense atmosphere at the London headquarters, where employees are waiting for further decisions.Management The restructuring is also affecting management. Since Lewis took office in January, several regional leaders and HR managers have left. According to recent reports from Bloomberg, three senior executives from the Johnnie Walker brand are also set to leave the company. In addition, Diageo wants to flatten the organisation. This will place more decisions in the hands of local managers, so that the company can respond more quickly to markets.Regional performance The changes come at an important moment for the company’s results. Diageo recently reported organic net sales of 4.5 billion dollars (around 4.13 billion euros). That figure was above expectations, thanks to growth in Asia, Europe and Latin America. North America, however, remains a weak market. There, revenue fell by more than 9 per cent to 1.71 billion dollars (around 1.57 billion euros) due to difficult market conditions.InvestmentsDiageo wants to combine cost savings with targeted investments to secure growth. The company says it will present a clear strategy on 6 August during Capital Markets Day. More clarity on the progress of the restructuring will also be provided then. (rd) (at)Follow Business AM on Google News as well If you want access to all articles, take adv...