THE CHIEF OF Diageo – whose brands include Guinness, Smithwick’s, Rockshore and Smirnoff – is to cut costs to save $1 billion (€866.4 million) over the next three years in a bid to tackle low growth. What’s going on at the struggling drinks giant?

The move, which may put up to 150 jobs in Diageo’s Ireland operation at risk, is part of a major overhaul under boss Dave Lewis after the company revealed weaker sales and profits for the past year.

Lewis – a former Tesco chief executive who bears the nickname ‘Drastic Dave’ for aggressive cost cuts in his roles – took on the Diageo job in January.

The alcoholic drinks market has been hit globally as it grapples with lower alcohol consumption and consumer struggles with the cost of living.

Revenues at Diageo hit a decade low at the end of 2025, and on Thursday the drinks giants reported a 3% decline in net sales to $19.6 billion (€16.98 billion) for the year to June.

Former Tesco chief executive Dave Lewis was previously dubbed “Drastic Dave” for his approach to cutting costs. Alamy Stock Photo Alamy Stock Photo

Job cuts

In June, Diageo informed staff that a number of Irish jobs will be cut as it undergoes restructuring.

The company employs around 1,200 people in Ireland, across brewing, production, marketing, sales and commercial support. Diageo is globally headquartered in London, but its Irish base is at the historic St James’s Gate Brewery in Dublin 8. 

The Department of Enterprise received a notification from the company of proposed collective redundancies at the time. It’s understood approximately 150 jobs will be affected. 

Diageo has not yet disclosed the jobs impact of the restructuring, but losses look likely abroad too, with unions in Scotland warning that the group has placed 172 distillery workers at risk of redundancy. 

The company employs over 30,000 people worldwide, with operations in 180 countries.

Sliding sales

Whiskies of the Diageo group. Alamy Stock Photo Alamy Stock Photo

Diageo saw a downturn in revenues and profits under previous chief executive Debra Crew. But Lewis has said the business is “confident” it can deliver improvement without its profits “taking a step back”.

Thursday’s reports of a decline in net sales was dragged back further by weakness in North America, where net sales slid by 9.1% for the year.

This was partly offset by 5.7% sales growth in Europe. The company saw a 6.8% growth in net sales in the UK driven by continued soaring demand for Guinness, which grew by “double digits”.

Announcing the latest cost-cutting measures, Lewis said there is “hard work ahead” for the business, particularly in North America.

Around $850 million (€736.44 million) of Diageo’s savings is set to come from operations, with around $150 million (€129.96 million) to be saved from its supply chain.

Diageo said the restructuring costs linked to the shake-up would cost the company around $1.2 billion (€1.04 billion).

Diageo also reduced its proposed dividend payment to shareholders by more than half compared with a year earlier following the reduction in profit.

However, Lewis has categorically ruled out selling any of its over 200 brands of alcohol.

Speaking to the Business Post, the CEO said: “We’re not hawking our brands.”

He said many investment bankers have told him which brands he should sell.

“We told all of them we’re not selling any of them, so we’re just going to roll our sleeves up and get on with our own business,” he added.