Diageo reduced its workforce by almost 2,000 people in its last financial year as part of the company’s efforts to cut costs and improve its performance.
According to Diageo’s latest annual report, issued yesterday (18 August), the Johnnie Walker distiller had 27,938 full-time equivalent roles in the year to the end of June.
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Twelve months earlier, that number stood at 29,860 a year earlier, a reduction of 1,922 employees, or about 6.4%.
In Diageo’s 2023/24 financial year, it had 30,367 full-time equivalent roles.
The steepest regional reduction in the last 12 months came in Africa, where average headcount fell from 2,848 to 1,920.
North America and Europe were the only areas to see positions increase year on year.
In a statement alongside the report, Diageo CEO Sir Dave Lewis, who started at Diageo in January, said: “During the year, the board took action to create the financial flexibility needed to support the turnaround. We have to strengthen the balance sheet and reduce leverage, while continuing to invest in the areas that will make Diageo more competitive. These are not separate choices.”
Diageo has been under scrutiny for months over the scale of job losses tied to Lewis’s turnaround plans.
Earlier this month, the Tanqueray distiller said it is seeking around $1bn in savings over three years, with about $850m expected to come from a “redesign” of its “operating framework”.
Speaking to reporters, Lewis said: “Diageo had a programme which was investing ahead of growth”, adding the company needed to “right-size the business”.
He also told reporters many of the planned changes were in areas such as “core finance functions, core technology functions, HR” rather than sales and marketing.
The company had repeatedly declined to spell out the total number of job cuts while consultation processes have been under way in Europe.
In the year to 30 June, the Captain Morgan rum distiller’s net sales fell 3% to $19.64bn. Organically, its net sales dipped 2% against a backdrop of weaker sales in North America and Asia Pacific.
Operating profit slid 27.2% to $3.16bn but, on an adjusted basis, rose 2% attributed “to the benefit of cost savings, partly offset by adverse mix and tariffs”. Profit for the year fell 22.8% to $1.96bn.
