Diageo has increased the target of its current cost-saving initiative by a further 25% but has stopped short of detailing how many jobs will be cut.
The programme, dubbed ‘Accelerate’, was first announced by the group in May, with the aim of reducing operational costs by around $500m over the next three years. During a post-results call today (5 August), however, interim CEO Nik Jhangiani said the target has been raised to $625m during the same period.
Jhangiani, who joined the group as CFO late last year before replacing outgoing CEO Debra Crew temporarily last month, insisted the initiative is as much about reinvestment and capability-building as it is about efficiency. The updated target follows further internal reviews since May, he added, with the programme positioned as a “strategic enabler” rather than a blunt cost-cutting exercise.
“This is really not about job cuts or elimination of roles,” Jhangiani said. “Yes, there will be some, but that’s not what this is about. This is about freeing up resources and dollars where we can reinvest for the business.”
Three priority reinvestment areas have been identified – commercial execution, digital capabilities and higher-impact brand marketing. “We’re making sure our offerings are tailored to the types of occasions consumers are trying to consume,” Jhangiani added, “whether that’s more RTDs, more non-alc or low-ABV options.”
Also on the call, Jhangiani highlighted Diageo’s increased use of AI and “virtual content studios” to create faster, “culturally relevant” campaigns. “We activated our Guinness Premier League partnership at scale across the globe in different languages and cultural nuances,” he said. “We plan to scale this in-house content creation across more markets and brands.”
Earlier today, Diageo booked a 1.7% increase in 12-month sales to the end of June, reversing fiscal 2024’s top-line decline of 0.6%.
Last month, Diageo was reportedly preparing to undertake a strategic review of its 65% holding in East African Breweries as part of an ongoing reassessment of its brewing operations in Africa.
