Archive · 6 Aug 2026
Diageo Launches $1 Billion Cost-Cutting Plan Under New CEO
Diageo is a big drinks company that makes Guinness, Johnnie Walker and Smirnoff.
It is the world's largest spirits company.
Recently, it sold fewer drinks and earned less money.
Its new boss, Sir Dave Lewis, announced a plan to save $1 billion over three years.
The plan involves cutting costs and making its supply chain work better.
They also want to sell a wider range of drinks, including more affordable options, instead of relying heavily on premium spirits.
Sales fell in North America, its biggest market, and in Asia Pacific, where China's baijiu business was weak.
Europe performed well because people bought more Guinness and stocked up before the FIFA World Cup.
Investors liked the plan, and the company's share price went up.
Diageo hopes these changes will help it grow again.
Diageo announced a $1 billion (£745 million) cost-cutting programme under new CEO Sir Dave Lewis to revive growth.
The plan targets around $850 million in restructuring savings plus $150 million from supply chain improvements over three years.
Full-year organic net sales fell 2% to $19.6 billion and operating profit dropped 27.2% to $3.15 billion.
North America, about 37% of sales, saw organic sales fall 8.4%, while Asia Pacific declined 6.3% on weakness in China's baijiu market.
Europe grew 3.4% on strong Guinness demand and World Cup-related buying, and Diageo shares rose 7% to £17.62 on the news.
- Who
- Diageo, the world's largest spirits company, and its new chief executive Sir Dave Lewis.
- What
- Launched a $1 billion cost-cutting programme and a broader portfolio strategy to revive growth after weaker sales and profits.
- When
- Announced alongside results for the year ended June, following Sir Dave Lewis's arrival as CEO at the beginning of the year.
- Where
- Across Diageo's global markets, with the steepest decline in North America and weakness in Asia Pacific, while Europe and Latin America and the Caribbean grew.
- Why
- Consumers are cutting spending amid economic uncertainty, and softer demand for premium spirits prompted a strategic overhaul.
- Company
- Diageo (FTSE 100, world's largest spirits company)
- Cost-cutting programme
- $1 billion (£745 million)
- Expected savings
- About $850 million from restructuring plus $150 million from supply chain improvements
- Organic net sales
- $19.6 billion, down 2%
- Operating profit
- $3.15 billion, down 27.2%
- North America sales
- Down 8.4%; region accounts for about 37% of global sales
- Dividend
- Halved to 50 US cents per share
- Share reaction
- Up 7% (121p) to £17.62