Recently, newly appointed CEO Dave Lewis, often referred to as ‘Drastic Dave’ for his sometimes aggressive business strategies, has unveiled intentions to significantly boost production of Diageo’s prominent Guinness brand, nearly doubling its output.
This announcement coincided with the beverage manufacturer reporting a mixed bag of annual results, featuring a 3% decline in net sales, which totaled US$19.64 billion, contrasted with a more favorable 2% increase in organic operating profit, reaching US$5.68 billion.
On a brighter note, shares of the London-based company saw an 8.7% increase yesterday after Lewis reiterated his ambitious turnaround strategy, which involves substantial cuts to a “significant” segment of the firm’s workforce of 30,000.
Lewis has not yet disclosed specific numbers regarding the anticipated job reductions, a key component of his plan to revamp the company’s operations.
Brought in last November to steer Diageo away from its declining performance, the former Tesco chief faced speculation from analysts regarding the potential divestment of Guinness, considered a crown jewel in the company’s offerings.
Nevertheless, this week, Lewis demonstrated strong support for the iconic Irish stout, signaling plans for greater investment into the brand rather than pursuing a sale.
Most of the necessary savings to realign Diageo’s trajectory are expected to derive from cuts across its global employee base.
