Diageo set for major restructuring as CEO Dave Lewis targets costs
Diageo, which employs almost 30,000 people globally, has already undergone significant leadership changes under Lewis’s tenure.
Diageo CEO, Dave Lewis has tasked members of Diageo’s executive leadership team with delivering cost reductions across their respective divisions, with headcount reductions expected to form part of the wider programme. An announcement outlining the scale of the changes is anticipated in the coming weeks, , according to a report in The Irish Times.
The restructuring marks the latest step in Lewis’s efforts to revitalise the owner of Guinness, Johnnie Walker and Smirnoff, six months after taking the helm of the FTSE 100 drinks group.
Diageo, which employs almost 30,000 people globally, has already undergone significant leadership changes under Lewis’s tenure. The company has seen departures from several key regional leadership positions, including Great Britain, North America and Africa, alongside changes within its human resources function.
In February, Diageo confirmed plans to redesign its operating framework as part of a strategy aimed at delivering sustainable shareholder returns and creating a more competitive organisation. The company has indicated that further details on its progress will be provided during its Capital Markets Day on 6 August.
Challenging market conditions
Earlier this year Diageo opened its new Littleconnell Brewery in Newbridge, Co. Kildare, marking the company’s long term commitment to brewing in Ireland. Pictured at the opening was An Taoiseach Micheál Martin and Sir Dave Lewis, Diageo CEO
The restructuring comes as Diageo continues to navigate challenging market conditions across the global spirits sector. Premium spirits brands have faced slower demand in recent years as consumers contend with economic pressures and changing drinking habits, prompting many producers to reassess growth strategies.
The Irish Times reported that Lewis has signalled a shift in focus towards strengthening Diageo’s presence in more accessible price segments, alongside greater investment in growth categories such as ready-to-drink (RTD) cocktails. Industry observers view the move as a notable evolution from the group’s longstanding emphasis on premiumisation.
The former Tesco chief executive, who earned a reputation for implementing extensive cost-saving programmes during previous leadership roles, is understood to have developed the restructuring plans internally rather than relying heavily on external consultants.
According to the report, investor sentiment towards Diageo has been under pressure in recent years, with the company’s shares falling significantly from their 2022 peak amid weaker spirits consumption and broader concerns about long-term category growth.
For the wider drinks industry, Diageo’s restructuring will be closely watched as one of the sector’s largest players adapts its portfolio, operating model and route-to-market strategy in response to changing consumer behaviour and ongoing market headwinds.
Source: The Irish Times, citing Financial Times reporting.
