Johnnie Walker maker faces axe as ‘drastic Dave’ orders cost-cutting blitz: Report
Dave Lewis, the newly appointed chief executive of Johnnie Walker maker Diageo, has reportedly instructed senior executives to identify cost-saving measures, including possible reductions in staff numbers, as he embarks on a wider restructuring at the global spirits company.
According to a report prepared by Finance Times On Wednesday, Mr. Lewis asked executives across the organization to cut costs as the company tries 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 for aggressive cost-cutting strategies, has reportedly assigned cost-cutting targets to Diageo’s board members. Instead of specifying a fixed number of jobs to be eliminated, managers were tasked with meeting savings targets, the report said.
Internal Announcement Expected Soon
The Financial Times report added that details on the extent of potential job losses could be announced internally as early as next week.
The reported restructuring effort comes at a critical time for Diageo, one of the world’s largest alcoholic beverage companies, whose portfolio includes globally recognized brands such as Johnnie Walker. Reuters reported.
Responding to Reuters in an emailed statement, Diageo did not comment directly on the reported layoffs but reiterated plans it had previously outlined earlier this year.
“In February, we shared our intention to redesign our operating model to increase competitiveness and deliver sustainable returns,” the company said.
Diageo also said investors will receive an update on the initiative during Capital Markets Day, scheduled for August 6.
Focusing on Increasing Competitiveness
The leadership changes and restructuring efforts come as Diageo struggles to meet weak demand in several markets.
Last month, Mr. Lewis said the company was already taking steps to combat stagnant sales in North America, its biggest market. He described the region as Diageo’s “biggest challenge” and said the company was taking measures to improve performance.
These measures included price reductions on selected tequila brands, including Casamigos, with which the company aimed to attract consumers and strengthen sales momentum.
North America Remains the Key Challenge
Mr Lewis also said Diageo was undertaking “fundamental” work to improve its global competitiveness, signaling a broader effort to strengthen the business beyond North America.
The announced cost-cutting program is expected to form part of this wider strategy as the company looks to streamline its operations, improve efficiency and position itself for long-term growth.
While the exact extent of the workforce reduction remains unclear, investors and employees are expected to keep a close eye on further details in the coming weeks, particularly ahead of Diageo’s investor presentation in August.
The company has yet to announce any formal restructuring measures beyond its previously stated plans to redesign its business model.
