Diageo Announces Cost Reductions and Layoff Plans
Diageo’s newest CEO Dave Lewis has instructed the company’s top executives to implement a series of job cuts and cost reductions across all departments.
The decision to cut roles and costs comes after a period of financial difficulty and declining sales for the multinational beverage company.
Within these plans, Dave has established cost reduction targets for Diageo’s executive committee, rather than giving them a specific number of roles to eliminate. An unnamed person familiar with Diageo’s plans says that “non-revenue-generating” teams would take the biggest hit amid these changes.
An internal announcement regarding the scale of the jobs cuts will be made next week, with one employee adding that there was currently a “funeral home atmosphere” inside Diageo’s London head office.
The brand, which owns Guinness and Johnnie Walker, currently employs close to 30,000 people worldwide.
Sustainable returns for shareholders
Since Dave was first appointed as company CEO in November 2025, Diageo’s head executives in the UK, the US and Africa have all left or are in the process of leaving the company.
The company recently named Unilever’s UK executive Marc Woodward – a former colleague of Dave’s – as leader of its domestic business.
Discussing Marc’s departure in a company statement, Unilever UK says: “We thank Marc for his contribution to Unilever and wish him every future success. His successor will be announced in due course.”
In February, Diageo announced plans to redesign its operating framework to “drive sustainable returns for shareholders by delivering a more competitive Diageo”.
“We will always prioritise informing our colleagues of any organisational changes first and have committed to update shareholders on our progress at a Capital Markets Day on 6 August,” the company said in a statement.
Company investors haven’t been privy to Dave’s restructuring plans following its financial downturn in the past few years.
He previously hinted at plans to cut prices to win back consumers – an approach that could mark a big departure from the company’s focus on high-end brands.
Dave, nicknamed “drastic Dave” for his reputation as cost cutter at Tesco and Unilever, established his plans to restructure Diageo without the help of other executives or consultants, according to company executives familiar with the matter.
Investing in mass-market brands for growth
Following Dave’s announcement that the company would cut dividends and offered his initial assessment of the business going forward in February, company shares fell almost 13%. Dave argued the cuts needed to be implemented so Diageo could focus on investing in more mass-market brands to boost growth.
At a recent company-wide meeting in May, Dave announced a strategic push into the ready-to-drink canned cocktail market, reflecting his plans to introduce more affordable options for younger drinkers into Diageo’s portfolio.
Following an industry-wide increase in pricing amid the pandemic’s consumption boom, the sector has failed to recover from a substantial decline in sales.
This decline has fuelled worries that a drop in sales is a structural issue for the entire industry, as consumers opt for more cost effective and health-conscious beverage options.
Additionally, last month Dave said the company had begun tackling weak sales in North America, its largest market, which he called its “biggest challenge”. He added that Diageo had undertaken “fundamental” steps to address competitiveness around the world.
