Pernod Ricard starts laying off employees in India rejig
French liquor giant Pernod Ricard has laid off at least 50 people in India, or nearly 5% of its workforce, following a restructuring under way in the local outpost of the world’s second-largest spirits maker.
Pernod’s local unit was letting go people mostly in sales and in consumer insights teams, among others. Sources said the layoffs were not a part of downsizing, but an attempt in addressing redundancies and building a younger workforce.
Pernod — the maker of premium spirits brands, including Chivas Regal and Absolut — has around 1,100 employees in India. An email sent to Pernod Ricard India didn’t elicit a response till the time of going to print. Incidentally, the layoffs come at a time when Pernod has rolled out new brands like Imperial Red rum and reintroduced Something Special, a locally bottled scotch whisky.
A senior executive at the company said, “Although we were expecting some fallout from the not-so-good results, we didn’t expect the company to take this step. It happened without a warning and people just about had a week to leave.”
The liquor industry was dealt severe blows due to demonetisation and the Supreme Court’s ban on liquor sales along highways. Pernod, which follows a July-June calendar year, reported 9% sales growth in India between July and December 2017. The company witnessed a slowdown in sales in Punjab and Haryana due to regulatory hurdles.
Pernod, which is only behind Britain’s Diageo, reported a 14% increase in sales for the first nine months of its fiscal, compared with just 1% in the year-ago period. Pernod’s growth in India has been driven by its focus on premium and midpriced whiskies, helping it maintain a lead over Diageo, which has been also shifting its focus on similar categories due to meatier margins. Pernod Ricard India sold 43 million cases last year, including Imperial Blue (18 million), Royal Stag (16 million) and Blenders Pride (6.2 million).