Diageo’s CEO Sir Dave Lewis has reportedly asked company executives to reduce staff numbers and other costs at the drinks giant.
Two unnamed sources told The Financial Times the chief executive had handed over cost-reduction targets to Diageo’s executive committee, instead of a specific number of positions to cut.
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Another person told the publication that “non-revenue-generating” teams would be the hardest hit.
The report added an internal announcement on the scale of the job losses would be made next week. Another unnamed source also said that Diageo’s London HQ had a “funeral home atmosphere”.
Approached by Just Drinks on the details of the report, a Diageo spokesperson said: “In February, at our interim results, we shared our intention to redesign our 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.”
Since Lewis started at Diageo in January, the group’s regional chiefs for North America, Great Britain and Africa, as well as its head of HR have all left the business.
John O’Keefe replaced the company’s former North America head Sally Grimes in April. Diageo declined to confirm whether replacements had been found for the other positions.
Last month, an article from Bloomberg suggested three of the Johnnie Walker brand owner’s senior executives were due to leave the business.
Referring to unnamed sources, the report said Ed Pilkington, the chief marketing and innovation officer for Diageo’s North America division, Hina Nagarajan, the president of the group’s business in Africa and chief HR officer Louise Prashad were expected to leave the company.
Diageo declined to comment on the story to Just Drinks at the time.
In April, a Bloomberg report indicated Lewis was planning to downsize the company’s regional management structure.
The article, which cited unnamed sources, said Lewis intended to “streamline” the teams as part of his “turnaround” strategy for Diageo.
Lewis reportedly said the move “will give greater power to managing directors who should hold more decision-making capabilities for their markets”, according to unnamed people who were said to have attended a town hall meeting.
In response at the time to the report, a company spokesperson said: “As the turnaround progresses, we continue to communicate openly with all our Diageo colleagues. We committed to update all stakeholders on our progress during calendar Q3 and this remains our timeline.”
Diageo issued better-than-expected quarterly sales last month but the spirits giant’s business in North America remained under pressure.
In the three months to the end of March, Diageo’s third quarter, the Guinness owner saw group organic net sales rise 0.3% to $4.5bn. The consensus forecast among analyst was sales would drop 2.3%.
The group reported “strong” organic sales growth from its operations in Europe and Asia, as well as its combined Latin America and Caribbean [LAC] division.
Diageo reiterated its guidance for its 2026 financial year at the time. The company is expecting to see organic net sales decline by 2-3% and a “flat to up low-single-digit” growth in organic operating profit.
Third-quarter organic net sales in North America were down more than 9% to $1.71bn, due to “soft market conditions and the need for a more competitive offer”, the company said in a stock-exchange filing.
Speaking to analysts after the results were released, Diageo’s management was pressed multiple times by analysts on the work it was doing to revive sales, particularly in the US.
Neither Lewis nor CFO Nik Jhangiani revealed much on the group’s plans for the market and repeated on several occasions the finer details of an updated strategy will be announced in August when Diageo publishes its full-year results and hosts a capital markets day.
