Diageo's New Chief to Unveil Restructuring Plans Amid Job Cut Rumors

Diageo's newly appointed chief executive, Dave Lewis, is expected to announce significant restructuring plans this week, which could include substantial job cuts. Lewis, who took the helm at the FTSE 100 company in January, will share details of his strategy at the group's capital markets day on Thursday, August 6.

Speculation has mounted that the former Tesco chief executive, nicknamed 'Drastic Dave,' will implement considerable workforce reductions. Reports suggest some teams may be halved in size and certain offices could be closed as part of the shake-up. Lewis's strategy is also anticipated to focus on enhancing the competitiveness of Diageo's product portfolio. This includes a renewed emphasis on the growing 'ready to drink' canned beverage market and potential price adjustments to attract value-conscious consumers.

Diageo, whose brands include Guinness, Johnnie Walker, and Smirnoff, is looking to turn around its recent performance. While the company's shares have risen 2 percent this year, they are down over 50 percent in the last five years. Analysts forecast annual sales for the year ending June 30 to have decreased by 2.1 percent to £14.5 billion, attributed in part to weak demand in the United States. Profits are projected to remain flat at £4.1 billion.

Investors will be looking for any positive impact from the recent World Cup, which took place from June to July. Despite challenges in the U.S. and Latin American spirits markets, demand for Guinness has reportedly seen a surge, particularly among younger consumers, with endorsements from figures like Dua Lipa and Olivia Rodrigo contributing to its growth in Europe. Analysts note that Diageo possesses the potential for significant investor appeal, but considerable work remains to be done to realize this.