![\"\"](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2026\/07\/00215a94-614.jpg\"\/)
<\/p>\nDiageo’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
<\/p>\n
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","protected":false},"excerpt":{"rendered":"Diageo’s new chief executive Dave Lewis has today unveiled a $1 billion restructuring plan, turning to aggressive cost-cutting…\n","protected":false},"author":2,"featured_media":514236,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[72,61,60],"class_list":["post-585097","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/585097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=585097"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/585097\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/514236"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=585097"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=585097"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=585097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}