Johnnie Walker maker Diageo's newly appointed chief executive, Dave Lewis, has reportedly instructed senior executives to identify cost-saving measures, including potential reductions in headcount, as he begins a broader restructuring of the global spirits company.
According to a report by the Financial Times on Wednesday, Mr Lewis has asked executives across the organisation to cut costs as the company seeks to address operational challenges and improve performance. The report cited people familiar with the matter.
Mr Lewis, who earned the nickname "Drastic Dave" during his previous leadership roles at Tesco and Unilever due to his aggressive cost-cutting strategies, has reportedly assigned cost-reduction targets to members of Diageo's executive committee. Rather than specifying a fixed number of jobs to be eliminated, executives have been tasked with meeting savings goals, the report said.
Internal Announcement Expected Soon
The Financial Times report added that details regarding the scale of potential job losses could be communicated internally as early as next week.
The reported restructuring effort comes at a critical time for Diageo, one of the world's largest alcoholic beverages companies, whose portfolio includes globally recognised brands such as Johnnie Walker, Reuters reported.
Responding to Reuters in an emailed statement, Diageo did not directly comment on the reported job cuts but reiterated plans it had previously outlined earlier this year.
"In February, we shared our intention to redesign our operating model to improve competitiveness and deliver sustainable returns," the company said.
Diageo also noted that investors would receive an update on the initiative during its Capital Markets Day scheduled for August 6.
Focus On Improving Competitiveness
The leadership changes and restructuring efforts come as Diageo attempts to address weaker demand in several markets.
Last month, Mr Lewis said the company had already begun taking steps to tackle sluggish sales in North America, its largest market. He described the region as Diageo's "biggest challenge" and said the company had introduced measures aimed at improving performance.
Among those measures were price reductions on selected tequila brands, including Casamigos, as the company seeks to attract consumers and strengthen sales momentum.
North America Remains Key Challenge
Mr Lewis also said Diageo had undertaken "fundamental" work to improve its competitiveness globally, signalling a broader effort to strengthen the business beyond North America.
The reported cost-cutting programme is expected to form part of that wider strategy as the company looks to streamline operations, improve efficiency and position itself for long-term growth.
While the exact scale of any workforce reductions remains unclear, investors and employees are likely to watch closely for further details in the coming weeks, particularly ahead of Diageo's August investor presentation.
The company has yet to announce any formal restructuring measures beyond its previously stated plans to redesign its operating model.
