Diageo’s new chief executive, Sir Dave Lewis, has directed senior executives to implement job cuts and reduce costs as part of a broader restructuring effort aimed at reversing the spirits group’s recent underperformance. Lewis, who took the helm six months ago, has assigned cost-reduction targets to Diageo’s executive committee, focusing primarily on trimming "non-revenue-generating" teams rather than specifying exact numbers for layoffs, according to sources familiar with the company’s internal discussions.

An official announcement detailing the scale of the workforce reductions is expected next week. One insider described the atmosphere at Diageo’s London headquarters as somber amid preparations for the restructuring. The company, which owns prominent brands such as Guinness and Johnnie Walker, currently employs nearly 30,000 people worldwide.

Since Lewis’s arrival, several key executives have departed or are in the process of leaving, including the heads of Diageo’s operations in Great Britain, North America, and Africa, as well as the company’s head of human resources. To strengthen its domestic leadership, Diageo has recruited Marc Woodward, former chief of Unilever UK and a past colleague of Lewis, to lead its UK business. Unilever acknowledged Woodward’s departure, expressing gratitude for his contributions and indicating that a successor would be named in due course.

In February, Diageo announced plans to "redesign its operating framework" to deliver more sustainable shareholder returns through increased competitiveness. While details of Lewis’s turnaround plan have remained limited, investors have been advised of a strategic shift geared toward efficiency and cost discipline.

Lewis, often referred to as "drastic Dave" for his previous aggressive cost-cutting at Tesco and Unilever, has reportedly developed the restructuring blueprint internally without relying on external consultants.

The company’s challenges reflect broader industry trends, as the spirits sector grapples with a persistent decline in sales following a pricing surge during a pandemic-driven boom in consumption. This downturn has raised concerns that shrinking demand may represent a structural shift, as consumers increasingly adopt health-conscious lifestyles and reduce alcohol intake, posing longer-term challenges for producers like Diageo.