Ivan Menezes is targetting annual savings of GBP200m at Diageo

Ivan Menezes is targetting annual savings of GBP200m at Diageo

Diageo has provided some more detail behind its plans to make substantial savings going forward, but declined to detail any possible job losses.

Earlier today (30 January), Diageo said in its H1 results announcement that it is targeting savings of GBP200m (US$331.4m) per year by the end of its fiscal 2016-2017. The statement offered little further information on how the savings will be made, with CEO Ivan Menezes claiming the plans would “simplify our processes and de-layer our organisation”.

At a press conference in London this morning, Menezes said the firm would move towards being a more de-centralised, “streamlined” model. 

“On the organisational side,” he said, “two-and-a-half years ago, we made the move to put accountability into our 21 markets and getting the best teams in place there. This step is just taking that further: We want to sharpen accountability and give markets the ability to move with more agility.”

Menezes highlighted Diageo's purchase of the Peligroso Tequila brand earlier this week as an example of this approach.

“The key is to try to move with the speed and entrepreneurial spirit of a small company,” he added. “That's what we've done with our Tequila moves. It's an evolution, it's not a revolution. But, there is efficiency and effectiveness to be had.”

When asked whether the savings would involve job losses, Menezes said: “It's too early to say. The detailed plans will be developed in the next couple of months. Once we're in a position to lay them out, we'll communicate them. Our people will be the first to know how our ways of working will involve.”

Menezes replaced Paul Walsh as Diageo's CEO in July.