Diageo (DEO) Slashes Jobs in Cost-Cutting Blitz Under “Drastic Dave”

Diageo plc, a London-based spirits-maker, announced on August 18 that it had reduced its workforce by over 6% to an average of 27,938 full-time employees as of June 2026. CEO Dave Lewis is spearheading the restructuring efforts to slash costs and improve operational efficiency. The mass layoffs, expected to be completed by September 1, are part of a broader plan to cut costs by nearly $1 billion over the next three years.

The company's restructuring program, dubbed "Drastic Dave," aims to free up funds for growth initiatives, such as lowering prices on some brands and expanding in fast-growing areas, including Guinness and canned cocktails. Despite the significant job cuts, Diageo's management believes the cost-saving measures could improve margins, even if revenue growth remains flat.

One area of particular interest is the company's growing sales of ready-to-drink cocktails, which have surged more than six-fold in the US alone, from $489 million in 2020 to $3.8 billion in 2023. However, Diageo faces several challenges, including weak North American sales, a broader consumer shift away from alcohol, and the financial burden of the restructuring program, which has already resulted in $514 million in severance costs.

If Diageo can convert the planned cost savings into revenue growth, it could position itself for long-term success in the industry.