Diageo slashed nearly 2,000 jobs during the year to June as the struggling drinks giant launched a restructuring drive to revive its fortunes. The headcount reductions come as newly appointed chief executive Sir Dave Lewis prepares a wide-ranging cost-cutting campaign across the global business.
Total headcount at the multinational group fell by 6 per cent to 27,938 on a full-time basis, down from 29,860 in the previous fiscal year, according to figures published in its annual report. The figures reflect substantial operational cutbacks implemented across several of the company's major geographic divisions.
Africa suffered the largest single portion of the workforce reduction, losing 928 jobs despite being historically one of the company's fastest-growing regions. A further 405 corporate roles were cut across the broader business, alongside 356 positions in Asia Pacific and 129 in North America, where dragging sales have weighed on regional performance over the past year.
By contrast, Diageo added 104 roles in Europe, where strong consumer demand for Guinness helped offset sales declines recorded in other divisions across the world.
The popularity of the historic Irish stout brand provided a rare bright spot for the business as broader demand for premium spirits faced headwinds in major international markets.
Restructuring plan and leadership strategy
The initial workforce reductions mark the opening phase of a broader corporate overhaul led by chief executive Sir Dave Lewis, who joined the company in January. Earlier this month, Lewis outlined a comprehensive £740 million cost-cutting drive spanning the next three years, designed to revive financial growth and restore what he called a "winning culture."
Lewis stated that the FTSE 100 company would face "significant job cuts" as part of the savings plan. He previously warned that taking a "country by country" operational approach had become a "route to failure" for the international beverage manufacturer.
Although Lewis refused to reveal the precise number of additional jobs that will be eliminated over the three-year period, the reductions are expected to concentrate on core support functions, including finance, technology and HR roles, rather than brand management or marketing teams.
A fresh round of job cuts will add to the thousands of roles already lost in the year to June 30. The final figure of total job losses is expected to rise further, with most of the reductions across regional markets expected to be completed by September 1.
To support sales, Diageo announced that it will pile more money into cutting product prices to appeal to cash-conscious consumers struggling with higher living costs. The business also plans to expand its fastest-growing drinks categories, particularly Guinness and canned cocktails.
Executive background and company profile
Lewis arrived at Diageo with an established reputation for aggressive corporate restructuring. During his previous tenure as chief executive of Tesco, Britain's largest supermarket retailer, his willingness to implement sweeping cost reductions and overhaul legacy operations earned him the nickname "drastic Dave" among industry analysts and media commentators.
Diageo is one of the world's largest spirit and beer producers, maintaining a prominent position on the London Stock Exchange as a constituent of the benchmark FTSE 100 index. Based in the United Kingdom, the company owns a portfolio of iconic global drinks brands, including Johnnie Walker Scotch whisky, Smirnoff vodka, Captain Morgan rum, Tanqueray gin and Baileys liqueur.
