Diageo has downplayed the possibility of major job cuts as part of its Accelerate programme, even as the London-listed supplier increased its target for cost savings by 25%.
Speaking after Diageo reported a modest 1.7% increase in organic sales in the full year ended 30 June 2025, interim CEO Nik Jhangiani revealed that the Johnnie Walker owner was now eyeing cost savings of $625m over the next three years from Accelerate, up from the $500m target announced in May.
The savings would come from reduced overheads, more targeted trade investment and A&P and supply chain efficiencies, Diageo said.
Pressed on whether this would mean job cuts, Jhangiani said: “This is really not about job cuts or elimination of roles. Yes, there will be some but that is really not what this is about. This is about freeing up resources and dollars where we can reinvest for the business.”
In North America, opportunities identified through Accelerate had actually led Diageo to “put more feet on the street” to help its distributors and customers grow sales, Jhangiani revealed.
“This could actually be about more numbers in terms of headcount, including here in our home market where there is an opportunity to drive [growth] across not just Guinness but also in spirits,” he added.
Expanded use of AI
Other areas of cost-saving opportunity identified by Diageo included changes made to its operating model to account for regional consumer differences across southern Europe, as well as increasing its use of AI in marketing, revealed Jhangiani.
“There are significant opportunities for us to utilise AI with our virtual content studio for our brands,” he said. “In fiscal 25 we [used AI and] activated our Guinness Premier League partnership at scale quickly across the globe for different languages and cultural nuances. We plan to scale this in-house content creation across more markets and brands in the years to come.”
Alongside the launch of Accelerate in May, Jhangiani outlined plans to make divestments “above and beyond” smaller brand sales announced in recent years.
On Tuesday (5 August), Diageo’s interim CEO said non-core disposals were “moving at pace” but declined to give any clues about which brands could be on the chopping block.
“It is premature to talk about the portfolio,” he said. “We’ve always been active portfolio managers, and that doesn’t change. But for now, I’m focused on making sure we’re really sharpening that portfolio and our strategy to make sure our portfolio continues to be relevant as we serve and support our consumers for growth.”
In the UK, Diageo’s sales in the year to 30 June grew by 3.5% on an organic basis. The growth was led by double-digit value gains on Guinness, despite “temporary supply constraints” on the stout at Christmas.
It was “very difficult to quantify” the exact scale of opportunity lost by Guinness shortages, Jhangiani said.
However, Diageo had “made all the right moves” during the crisis, including moving stock from other markets to the UK, and the shortages were now “well behind us”, he insisted.
Jhangiani took over the role of CEO on an interim basis last month, after Debra Crew stood down by mutual agreement. The Diageo board was expecting to appoint a permanent successor to Crew by the end of October, Jhangiani said.
Diageo shares role by almost 6% in early morning trading on Tuesday.
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