Pernod Ricard warns of further job cuts

Pernod Ricard has told staff of potential job cuts and a restructuring of its business to create "a more agile" operation. Ron Emler reports. The French spirits maker says it has announced an "internal project to create a more agile and simplified organisation". "These changes imply the launch of local consultation processes with our social partners and employees where necessary," Pernod Ricard said. While the company has not yet announced any numbers, reports suggest that the job cuts will take place towards the end of this year

Streamlining operations

They say the French group will streamline its operations by grouping brands into two main divisions named Gold and Crystal. The Gold division will include the Mumm and Perrier-Jouët Champagnes, plus brands such as Martell Cognac and Jameson Irish Whiskey; the Crystal division will include Havana Club, Absolut vodka and some French aperitif brands. In a staff memo chairman and chief executive Alexandre Ricard said the "Tomorrow 2" programme would "further advance the simplification of our organisation".

Job losses

He told staff in a video that the restructuring, which includes combining administrative tasks rather than having brands operate individually, would lead to "departures", according to Reuters. There will certainly be job losses at the UK arm following the sales of the French group’s wine interests to Vinarchy at the end of April. Wine comprised some 25% of Pernod Ricard's sales in the UK. Previously the company had already announced job cuts in China, where steep anti-dumping duties on Cognac have hit Martell’s sales hard, as well as a plan to cut €1 billion (US$1.15 billion) in costs by its 2029 financial year.

Reduced spending patterns

Pernod Ricard also faces reduced spending patterns in the US while the threat of penalty tariffs still hang over Cognac. The presentation to staff comes in advance of annual results for the year which ends in 10 days’ time. Those results are expected to be weak. Last month rival LVMH's wines and spirits division Moët Hennessy announced plans to shrink its workforce by nearly 13%. Brown-Forman has also shed 12% if its workforce and slashed forecasts. At the same time Diageo is looking to make cost saving of up to £500m in the coming years.