{"id":45395,"date":"2026-08-07T00:22:46","date_gmt":"2026-08-07T04:22:46","guid":{"rendered":"https:\/\/sharewatch.com\/wp\/2026\/08\/07\/diageo-ceo-to-cut-costs-by-1-billion-amid-low-growth\/"},"modified":"2026-08-07T00:22:46","modified_gmt":"2026-08-07T04:22:46","slug":"diageo-ceo-to-cut-costs-by-1-billion-amid-low-growth","status":"publish","type":"post","link":"https:\/\/sharewatch.com\/wp\/2026\/08\/07\/diageo-ceo-to-cut-costs-by-1-billion-amid-low-growth\/","title":{"rendered":"Diageo CEO to cut costs by $1 billion amid low growth"},"content":{"rendered":"
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Updated \/ Thursday, 6 Aug 2026 14:56 \t\t<\/span> <\/p>\n<\/p><\/div>\n

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\"Business <\/p>\n<\/p><\/div>

Diageo chief executive ‘Drastic’ Dave Lewis<\/figcaption><\/figure>\n
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Diageo’s new chief executive Dave Lewis has today unveiled a $1 billion restructuring plan, turning to aggressive cost-cutting in order to reset performance as the world’s top spirits maker anticipates years of low growth.<\/p>\n

Investors welcomed the overhaul as a sign that Lewis was moving quickly to tackle years of stagnant or falling sales, sending shares in the Guinness and Johnnie Walker whisky maker up as much as 11% to a more than five-month high.<\/p>\n

The stock later pared gains to trade 6.5% higher – on track for its best day since November 2020 if gains hold.<\/p>\n

The spirits industry has been struggling to chart a path back to growth as people have changed what, where and how much they drink.<\/p>\n

Lewis, nicknamed “Drastic Dave” for his history of cost-cutting at Tesco and Unilever, told journalists a restructuring programme of this size that changes the cost structure of the entire business had “very significant impacts” on colleagues.<\/p>\n

Lewis, who has been leading Diageo since January, said he did not want to disclose at this point the number of jobs affected and in some regions consultations were ongoing.<\/p>\n

Big changes were focused on global, back-office functions and in areas where there was “massive duplication” in processes in countries, regions and globally, he said.<\/p>\n

Some savings would also come from cutting back spending on more capacity in anticipation of growth that ultimately never materialised, Lewis said.<\/p>\n

Diageo reported severance costs of $514m for its fiscal year ended June 30, sharply up from $73m a year earlier.<\/p>\n

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The programme, which would bring the $1 billion in savings over three years, would cost $1.2 billion, with 70% of its costs already incurred, Diageo said.<\/p>\n

Other drinks makers have also restructured recently. Heineken said in February it would cut up to 6,000 jobs, while Pernod Ricard last year launched a plan to save \u20ac1 billion ($1.15 billion) by its fiscal 2029.<\/p>\n

Diageo, which also makes Smirnoff vodka and Captain Morgan rum, forecast low-single-digit organic net sales growth up to its 2029 financial year, softer than its previous target of 5% to 7% medium-term growth, which it scrapped in 2025.<\/p>\n

It also reported a 3% drop in net sales to $19.64 billion in the fiscal year to June 30.<\/p>\n

Lewis said the new outlook was shaped by weakness in its largest market, North America, which is expected to decline next year, stabilise in two years, and grow thereafter.<\/p>\n

Sales in the region fell 8.4% in fiscal 2026, more than the 8% analysts predicted, but Lewis said he was confident he could restore performance without sacrificing profits.<\/p>\n

Globally, Diageo also expects mid-single-digit organic operating profit growth with earnings per share growth, and cumulative free cash flow of $8 billion over three years after exceptional cash costs by 2029.<\/p>\n

Chris Beckett, consumer staples analyst at Quilter Cheviot, said Lewis seemed to be living up to his nickname with deeper cuts that will last longer than many expected.<\/p>\n

“If it can hit its three-year targets, however, then the pain of this restructuring will be considered worth it and investors should see greater returns once again,” he said.<\/p>\n<\/section>\n

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More stories on<\/h4>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Updated \/ Thursday, 6 Aug 2026 14:56 Diageo chief executive ‘Drastic’ Dave Lewis Diageo’s new chief executive Dave Lewis has today unveiled a $1 billion restructuring plan, turning to aggressive cost-cutting in order to reset performance as the world’s top spirits maker anticipates years of low growth. Investors welcomed the overhaul as a sign that […]<\/p>\n","protected":false},"author":1,"featured_media":45396,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ocean_post_layout":"","ocean_both_sidebars_style":"","ocean_both_sidebars_content_width":0,"ocean_both_sidebars_sidebars_width":0,"ocean_sidebar":"","ocean_second_sidebar":"","ocean_disable_margins":"enable","ocean_add_body_class":"","ocean_shortcode_before_top_bar":"","ocean_shortcode_after_top_bar":"","ocean_shortcode_before_header":"","ocean_shortcode_after_header":"","ocean_has_shortcode":"","ocean_shortcode_after_title":"","ocean_shortcode_before_footer_widgets":"","ocean_shortcode_after_footer_widgets":"","ocean_shortcode_before_footer_bottom":"","ocean_shortcode_after_footer_bottom":"","ocean_display_top_bar":"default","ocean_display_header":"default","ocean_header_style":"","ocean_center_header_left_menu":"","ocean_custom_header_template":"","ocean_custom_logo":0,"ocean_custom_retina_logo":0,"ocean_custom_logo_max_width":0,"ocean_custom_logo_tablet_max_width":0,"ocean_custom_logo_mobile_max_width":0,"ocean_custom_logo_max_height":0,"ocean_custom_logo_tablet_max_height":0,"ocean_custom_logo_mobile_max_height":0,"ocean_header_custom_menu":"","ocean_menu_typo_font_family":"","ocean_menu_typo_font_subset":"","ocean_menu_typo_font_size":0,"ocean_menu_typo_font_size_tablet":0,"ocean_menu_typo_font_size_mobile":0,"ocean_menu_typo_font_size_unit":"px","ocean_menu_typo_font_weight":"","ocean_menu_typo_font_weight_tablet":"","ocean_menu_typo_font_weight_mobile":"","ocean_menu_typo_transform":"","ocean_menu_typo_transform_tablet":"","ocean_menu_typo_transform_mobile":"","ocean_menu_typo_line_height":0,"ocean_menu_typo_line_height_tablet":0,"ocean_menu_typo_line_height_mobile":0,"ocean_menu_typo_line_height_unit":"","ocean_menu_typo_spacing":0,"ocean_menu_typo_spacing_tablet":0,"ocean_menu_typo_spacing_mobile":0,"ocean_menu_typo_spacing_unit":"","ocean_menu_link_color":"","ocean_menu_link_color_hover":"","ocean_menu_link_color_active":"","ocean_menu_link_background":"","ocean_menu_link_hover_background":"","ocean_menu_link_active_background":"","ocean_menu_social_links_bg":"","ocean_menu_social_hover_links_bg":"","ocean_menu_social_links_color":"","ocean_menu_social_hover_links_color":"","ocean_disable_title":"default","ocean_disable_heading":"default","ocean_post_title":"","ocean_post_subheading":"","ocean_post_title_style":"","ocean_post_title_background_color":"","ocean_post_title_background":0,"ocean_post_title_bg_image_position":"","ocean_post_title_bg_image_attachment":"","ocean_post_title_bg_image_repeat":"","ocean_post_title_bg_image_size":"","ocean_post_title_height":0,"ocean_post_title_bg_overlay":0.5,"ocean_post_title_bg_overlay_color":"","ocean_disable_breadcrumbs":"default","ocean_breadcrumbs_color":"","ocean_breadcrumbs_separator_color":"","ocean_breadcrumbs_links_color":"","ocean_breadcrumbs_links_hover_color":"","ocean_display_footer_widgets":"default","ocean_display_footer_bottom":"default","ocean_custom_footer_template":"","ocean_post_oembed":"","ocean_post_self_hosted_media":"","ocean_post_video_embed":"","ocean_link_format":"","ocean_link_format_target":"self","ocean_quote_format":"","ocean_quote_format_link":"post","ocean_gallery_link_images":"on","ocean_gallery_id":[],"footnotes":""},"categories":[19,20],"tags":[],"class_list":["post-45395","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-news","entry","has-media"],"_links":{"self":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/posts\/45395","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/comments?post=45395"}],"version-history":[{"count":0,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/posts\/45395\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/media\/45396"}],"wp:attachment":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/media?parent=45395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/categories?post=45395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/tags?post=45395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}