Diageo’s new chief executive, Sir Dave Lewis, has initiated a broad restructuring effort aimed at reducing costs and cutting jobs across the global spirits company. Lewis, who joined the firm six months ago, has tasked his executive leadership team with meeting cost-reduction targets within their departments, focusing largely on non-revenue-generating areas.

The company, headquartered in London and employing nearly 30,000 people worldwide, is expected to announce the scale of job losses soon, with internal reports describing a somber atmosphere among staff. Since Lewis’s arrival, several senior leaders, including heads of Great Britain, North America, Africa, and human resources, have either left or are in the process of departing. Additionally, Diageo recently appointed Marc Woodward, formerly Unilever’s UK chief and a former colleague of Lewis, to oversee its domestic business in the United Kingdom.

The move comes amid ongoing challenges for Diageo and the wider spirits industry, which has faced a prolonged decline in sales following a pandemic-driven surge in consumption. Initially, producers sharply raised prices during this increased demand, but consumption has since weakened as more consumers adopt health-conscious lifestyles and reduce alcohol intake. This shift has raised concerns that the downturn may be a structural rather than cyclical issue for the sector.

In February, Diageo signaled its intention to “redesign our operating framework” to create a more competitive business capable of delivering sustainable shareholder returns. However, investors have received limited details on the specific strategies Lewis plans to implement to revive the company’s performance.

Lewis, often referred to as “drastic Dave” due to his track record of aggressive cost-cutting at Tesco and Unilever, has approached the current restructuring with varying accounts about the role of external support. Some sources suggest that he formulated the plans with assistance from consultants, while others indicate the process was conducted without their involvement.

The restructuring at Diageo reflects broader industry challenges as premium spirits producers navigate shifting consumer behaviors and seek to adapt to a marketplace marked by both declining consumption and evolving health trends.