Diageo's new chief executive, Dave Lewis, has directed the company's executive leadership to pursue headcount reductions and additional cost savings as part of an organizational restructuring, according to people familiar with the matter.
Lewis, who has a reputation for aggressive cost management from previous roles at other retailers and consumer groups, has allocated specific cost-reduction targets to members of Diageo's executive committee. The instructions did not include a stated number of positions to be eliminated, and the company is expected to inform staff internally of the extent of any job losses next week.
Last month, Lewis acknowledged that Diageo had begun taking steps to address underperformance in North America, the company's largest market, calling it the firm's "biggest challenge." Among the measures already implemented were price reductions on certain tequila labels, including Casamigos, as part of efforts to stimulate demand.
Lewis has also said the company has completed work intended to restore its competitiveness on a global basis. The recent assignment of cost-reduction targets to the executive committee appears to be the latest step in a broader restructuring program intended to improve performance.
Executives given those targets were not reported to have received specific guidance on the number of roles that will be removed. The lack of a published headcount figure leaves uncertainty about the scale and timing of workforce changes until the company provides its internal update next week.
This directive follows Lewis's earlier public comments about taking action on weak sales in North America and implementing pricing moves on select spirits. The combination of targeted price adjustments and executive-level cost-reduction mandates signals a coordinated push to address both top-line weakness and structural cost positions within the business.
Further details on the restructuring and the resulting workforce implications were not provided beyond the planned internal announcement. Observers and stakeholders will be watching for the company's internal communication next week for clarity on the magnitude of any headcount reductions and the broader cost-savings plan.
Clear summary
Diageo's CEO Dave Lewis has told executives to implement cost reductions and reduce headcount as part of a restructuring effort. Targets have been issued to the executive committee without a specified number of job cuts, and the company plans an internal disclosure next week. Lewis has previously acted to address weak North American sales, including price cuts on select tequila brands, and says global competitiveness work is complete.