Pernod Ricard to cut 900 jobs globally

French drinks group Pernod Ricard is to shed 900 jobs from its global workforce as part of its cost-cutting scheme Project Allegro, which will also see two managing director roles removed.

Pernod Ricard is to cut 900 jobs from its global workforce in a bid to save costs

In a bid to save 150m over three years, Project Allegro, an “operational efficiency programme” which was first revealed in February this year, will streamline Pernod Ricard’s business and cut a number of roles, particularly from its commercial teams.

Announcing its full-year financial results for 2013/14, where the group saw a 14% net profit decline largely due to the impact of China’s austerity measures, Pernod Ricard revealed details of Project Allegro.

The group said it plans to reduce its workplace by 5% over three years, a move that will see 900 jobs cut across the globe, with 100 jobs axed in France alone. Other regions that will bear the brunt of these cuts have not been specified.

In 2013/14, Project Allegro generated savings of €30m, while Pernod Ricard hopes to save €75m in 2014/15 and €45m in 2015/16 and 2016/17. The group claims that at least €50m of these savings will be reinvested in its “priority brands”.

Job cuts which will generate a significant amount of these savings come from the brand development and commercial teams.

The brand development roles have been removed, and just partially redeployed to the marketing roles, while the sales and marketing teams have been completely merged for a “more holistic approach”.

Pierre Pringuet, CEO of Pernod Ricard, said: “These teams will be redeployed, not like for like because there have been job cuts, but the commercial have been redeployed to the marketing teams.”

Major executive cuts

In another drastic move, the company has decided to shed two executive roles. When Alexandre Ricard takes over as CEO of Pernod Ricard, his position as managing director for distribution networks will not be renewed, nor will Thierry Billot’s position as managing director for brands when he retires at the end of the year.

Of the recently announced mergers of France’s Pernod and Ricard distribution units, which was estimated to see 60 jobs lost, Pringuet said that negotiations were still underway with trade union representatives and were due to be wrapped-up by November this year.

Pringuet also revealed the creation of a single back office hub for Australia, New Zealand and Travel Retail Pacific along with the pooling of 42 markets in Pernod Ricard EMEA into 10 management entities.

While Pringuet said that Project Allegro had been implemented in now been implemented in most regions, he defended the programme as something which “by no means challenges” the group’s “fundamental principles”.

“Project Allegro is neither a reaction or knee-jerk programme, it’s an operational efficiency improvement project which we implemented and we gave this some serious thought,” he said.

“The aim of Allegro is to maximise our future growth potential.”