Diageo plans radical shake-up

Published: 26 May, 2011

Diageo is carrying out a major review of its operating model ? which will mean likely job cuts in Europe and North America.

Diageo is carrying out a major review of its operating model ? which will mean likely job cuts in Europe and North America.

The drinks giant is making the changes to capitalise on its success in emerging markets. Chief executive Paul Walsh said the review was necessary to ensure that resources are deployed "in those areas where the potential for growth is greatest".

An employee consultation has been launched regarding proposed "significant changes" to the group's European operation. Part of the changes to the company's structure, mean that chief customer officer Ron Anderson and president of Diageo International Stuart Fletcher will leave the company. A more detailed announcement on the scale of the changes will be made when Diageo files its annual results in August.

Walsh said: "The main driver of these changes will be to focus on growth and create a more cost effective organisation."

The group has also decided to split its international operation: from July 1 it will run Diageo Latin America and Caribbean and Diageo Africa separately. "The significant contribution which the Diageo International organisation has made to the development of these two regions has created the platform from which this change can be made," said Walsh.

The announcement comes as speculation grows over whether Diageo is planning to extend a distribution deal or buy tequila producer Jose Cuervo outright from owners the Beckmann family, in a deal rumoured to be worth £1.9 billion.

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