{"id":98708,"date":"2026-08-06T17:56:07","date_gmt":"2026-08-06T17:56:07","guid":{"rendered":"https:\/\/www.europesays.com\/britain\/98708\/"},"modified":"2026-08-06T17:56:07","modified_gmt":"2026-08-06T17:56:07","slug":"diageo-ceo-plans-1-billion-in-cost-cuts-as-he-confronts-weak-growth","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/britain\/98708\/","title":{"rendered":"Diageo CEO plans $1-billion in cost cuts as he confronts weak growth"},"content":{"rendered":"

Diageo\u2019s DEO-N<\/a> new CEO Dave Lewis unveiled a US$1-billion cost-cutting plan on Thursday, saying the world\u2019s top spirits maker must adapt to a prolonged period of weak growth.<\/p>\n

Lewis plans to use savings to invest for growth, including by reducing prices on some brands, and expanding in fast-growing areas including Guinness and canned cocktails.<\/p>\n

Investors welcomed the overhaul as a sign that Lewis, who has been leading Diageo since January, was moving quickly to tackle years of stagnant or falling sales.<\/p>\n

Shares in the Johnnie Walker whisky and Guinness beer maker rose as much as 11 per cent at one point to a more than five-month high. The stock eventually closed 5.6-per-cent higher.<\/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 \u201cDrastic Dave\u201d for his history of cost-cutting at Tesco TESO-Q<\/a> and Unilever UL-N<\/a>, said his restructuring plan would change the cost structure of the entire business, and have \u201cvery significant impacts\u201d on colleagues.<\/p>\n

He declined to disclose the number of roles that might be affected. Big changes were focused on global, back-office functions and in areas where there was \u201cmassive duplication,\u201d he said.<\/p>\n

Some savings would also come from cutting spending on capacity increases for growth that never materialized, Lewis said. Diageo reported severance costs of US$514-million for its fiscal year ended June 30, sharply up from US$73-million a year earlier. Reuters reported in July some Diageo teams were facing up to 30-per-cent reductions.<\/p>\n

The overhaul, saving US$1-billion in costs over three years, would cost US$1.2-billion, with around 70 per cent of those costs already incurred, Diageo said. That compares with net revenues of US$19.64-billion, down 3 per cent from a year ago. Other drinks makers have also restructured recently. Heineken HEINY<\/a> said in February it would cut up to 6,000 jobs, while Pernod Ricard PRNDY<\/a> last year launched a plan to save \u20ac1-billion (US$1.15-billion) by its fiscal 2029.<\/p>\n

North American challenge<\/p>\n

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

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

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

Mark Nelson, analyst at Killik & Co, said Lewis had announced higher savings than expected and reassured investors that price cuts and other competitive initiatives would not require a reset in profits. But, he said, it still wasn\u2019t clear how Diageo would deliver on its ambition to increase sales faster than the rest of the spirits market, given it has struggled to be successful in areas such as canned cocktails in the past.<\/p>\n

\u201cWe need to be convinced,\u201d Nelson said.<\/p>\n","protected":false},"excerpt":{"rendered":"Diageo\u2019s DEO-N new CEO Dave Lewis unveiled a US$1-billion cost-cutting plan on Thursday, saying the world\u2019s top spirits…\n","protected":false},"author":2,"featured_media":98709,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[21250],"tags":[5564,5555,5420,345,5547,5565,1193,5546,5560,5561,5557,5548,5545,4110,254,28,528,5559,5553,5576,5549,5550,181,5556,424,2441,5566,5551,5571,5572,5574,5569,5573,5567,5570,2843,5562,5563,14,654,5568,5554,1426,104,5558,5552,46,5575],"class_list":["post-98708","post","type-post","status-publish","format-standard","has-post-thumbnail","category-diageo","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-diageo","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"share_on_mastodon":{"url":"","error":"Validation failed: Text character limit of 500 exceeded"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/98708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=98708"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/98708\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/98709"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=98708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=98708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=98708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}