Diageo to double Guinness production and shed jobs in turnaround plan
New CEO Dave Lewis lifts investors’ spirits by promising strategic overhaul worthy of his nickname ‘Drastic Dave’ Diageo’s new chief executive has unveiled plans to double Guinness production while hacking back a “significant” proportion of its 30,000-strong workforce, in a strategic overhaul worthy of his nickname, “Drastic Dave” Lewis. Shares in Diageo bounced on Thursday, as the former Tesco…
Diageo's new CEO, Dave Lewis, announced plans to nearly double Guinness production while cutting a significant portion of the company's 30,000-strong workforce. This strategic overhaul, dubbed "Drastic" Dave Lewis, aims to increase global sales of Guinness, particularly in North America, to avoid shortages similar to those experienced in the UK in recent years.
Lewis promised to invest $1bn in the brand to increase production capacity from 8.2m hectolitres to 15.7m by 2031. The company is expected to incur $514m in charges related to employee severance as part of the restructuring plan, which aims to save $1.2bn over two years. While some investors welcomed the turnaround plan, others were concerned about the job cuts.
Lewis vowed to focus on a broader portfolio of brands, including mid-market brands and smaller-pack sizes, to better suit cost-conscious consumers.
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