Blog: Diageo job cuts - still waving, not drowning?
Olly Wehring | 7 July 2009
In these grim times, news stories of job losses in our industry are coming round on a weekly basis, at least. But last week's announcement that Diageo is to cut its workforce in Scotland by over 10% is alarming for other reasons.
About two months ago, I was talking to one of my senior sources within Diageo, and took him to task about the company's lack of official announcements when it came to workforce reductions. Over the last few months, news has been trickling out of Diageo HQ regarding job cuts in Africa, Ireland and the UK. Why, I asked my source, was the company not being forward in coming forward on the matter?
“Statements about job cuts suggest a company in trouble,” he said. “We're not in trouble.” A fair point, in February, when the company posted increases in both sales and profits for the first half of its fiscal year.
But now, in July, are things less rosy for the drinks giant? In May, Diageo said that sales were flat on an organic basis for the first nine months of its fiscal year, yet maintained that it was on course for operating profit growth for the full-year.
It will be interesting to see the firm's state of play for its full-year, which ended last week. Announcements of job cuts suggest that all is not well. And if Diageo is struggling, what does that say for the rest of our industry?
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