Diageo CEO Dave Lewis plans major job cuts as spirits giant battles US sales slump
Diageo's new chief executive Sir Dave Lewis is preparing substantial job cuts as part of his efforts to reverse the fortunes of the struggling drinks company, which owns brands including Guinness, Johnnie Walker whisky and Smirnoff vodka.
Lewis, who became CEO in January 2026, earned his nickname 'Drastic Dave' after implementing approximately 300 job cuts at Unilever's UK personal care division in 2007 to counter a sales slump. At Tesco, where he served as CEO from 2014 to 2020, he cut more than 10,000 jobs and closed 200 stores as part of a cost-cutting drive that achieved £1 billion in annual savings.
Staff at Diageo's Edinburgh operations have been informed of plans for considerable redundancies, with some teams facing reductions of up to 50 per cent and certain offices earmarked for closure. One senior leadership team of around 100 people could be reduced by between 20 and 30 per cent, according to Reuters.
The exact scale of the job losses remains unclear. Diageo employed more than 29,000 staff globally last year.
Financial pressures mount
The restructuring comes as Diageo faces mounting financial challenges. The world's largest spirits producer by revenue has seen sales decline, with the company expecting a 2 to 3 per cent drop this year. In the first half of fiscal 2026, organic net sales fell by 2.8 per cent.
The company's struggles have been particularly acute in North America, which accounts for approximately 38 to 40 per cent of Diageo's net sales and represents its largest and most important market. US spirits sales plummeted 15.4 per cent in the third quarter, with tequila sales down 23 per cent.
In response to these pressures, Diageo reduced its quarterly dividend by 80 per cent to $0.20 per share in February 2026. The company's share price has fallen more than 50 per cent over the past five years, and dropped 10.8 per cent in a single week in early 2026 following disappointing financial results.
Transformation plans
Lewis is scheduled to outline his turnaround strategy to investors at a capital markets day on 6 August. In February, he pledged to design 'a much more agile Diageo' following reports that he would strip out layers of management.
A Diageo spokesman said the company 'shared our intention to redesign our operating framework' in February to 'drive sustainable returns for shareholders by delivering a more competitive Diageo'. He added that the company would 'always prioritise informing our colleagues of any organisational changes first'.
Barclays analyst Laurence Whyatt suggested there would likely be 'a larger and faster cost programme than investors currently assume'.
European bright spot
Despite struggles with other brands and regions, demand for Guinness has helped boost Diageo's European sales. The iconic stout has gained unexpected popularity among young women, with celebrity fans including singers Dua Lipa and Olivia Rodrigo.
Diageo was formed in December 1997 through the merger of Guinness and Grand Metropolitan. Today it owns over 200 brands sold in nearly 180 countries, with 13 billion-dollar brands including Johnnie Walker, Smirnoff, Guinness, Don Julio, Crown Royal, Baileys and Tanqueray.
Lewis, who was knighted by Queen Elizabeth II in the 2021 New Year's Honours List for his contribution to business and the food industry, spent nearly three decades at Unilever in various senior roles before his tenure at Tesco. Chairman John Manzoni is reportedly seeking drinks-industry veterans to join Diageo's board to strengthen sector expertise.
