Following a "global review," Diageo today announced it is making changes to its organizational structure to reduce business costs that will result in 150 employees in North America losing their jobs. The changes are effective in mid-April.
In a statement, Diageo said it will further integrate its beer and wine organizations, Diageo-Guinness USA (DGUSA) and Diageo Chateau & Estate Wines (DC&E) into a "total beverage alcohol approach" to cut costs.
Ray Chadwick, President of Diageo Chateau & Estate Wines will be leaving Diageo but will remain a non-executive board member and beginning in June, is to become the chairman of Wine Institute.
Diageo said it would soon announce "next steps" for Jim Young, President of Diageo-Guinness USA.
Sandra LeDrew will run the sales operation of DC&E as President, DC&E Sales; while Pete Carr will run the sales operation of DGUSA as President, DGUSA Sales. They will both report directly to Larry Schwartz, President, Diageo USA and will join the Diageo North America executive team.
"We are centralizing finance, supply, marketing and other functions within the business," Zsoka McDonald, a spokeswoman for the company said.
McDonald said the cuts represent four percent of Diageo's 3,700-person North American work force.
When interim results were disclosed in mid-February, Paul Walsh announced the organizational review. Diageo will be looking the rest of its business and is expected to make similar announcements in other parts of the world. Wash previously announced that the company was looking to take £100 million of costs out of the business globally.
"We expect conditions to get tougher and are preparing for the long term," McDonald said. "We have to improve organizational effectiveness and reduce costs. We had some difficult decisions to make about our people."