Diageo has been tight-lipped on a report that suggests CEO Dave Lewis plans to downsize the company’s regional management structure.
A report from Bloomberg yesterday (29 April), which cited “people familiar with the matter”, said Lewis intends to “streamline” these teams as part of his “turnaround” strategy for Diageo.
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Lewis reportedly said the move “will give greater power to managing directors who should hold more decision-making capabilities for their markets”, Bloomberg reported, citing people who attended a town hall meeting at the Johnnie Walker brand owner this week.
Employees at risk of redundancy are expected to be informed by mid-May, with the new organisational structure due to be in place by the second half of 2026, the people said.
Approached by Just Drinks for a statement on details in the Bloomberg report, a Diageo 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.”
Lewis, the former Tesco chief who took the helm at Diageo in January, also reportedly plans to implement global category strategies in local markets to reduce costs.
In February, he lowered Diageo’s sales outlook and made changes to its dividend, describing customer service levels in North America, Latin America, and the UK as “really not acceptable.”
The Captain Morgan producer now expects annual organic net sales to decline 2-3%, a downgrade from its previous “flat to slightly down” forecast.
Its updated dividend policy, now at 30-50%, was described by Lewis as “about recognising that we need to invest in the competitiveness of business.”
Speaking to analysts after the release of its half-year results, Lewis said the group will focus on building a portfolio that can be more resilient to economic pressures.
He then said the group was developing a new strategy which will be revealed to the market in the third quarter of 2026.
“I don’t want the Diageo business to be something that has to rely on the economic temperature in order to be successful. That’s going to be the change in the strategy you see going forward,” he said at the time.
In the six months ending in December, Diageo’s net sales fell 4% to $10.46bn or by 2.8% organically. Operating profit dropped 1.2% to $3.12bn on a reported basis and, before exceptional items, was also down 2.8%.
