Diageo’s new chief, Dave Lewis, has instructed his top executives to cut headcount and other costs in their departments, as the turnaround veteran kicks off a significant restructuring of the troubled spirits group.Lewis had given members of Diageo’s executive committee cost-reduction targets, rather than a specific number of roles to eliminate, according to two people familiar with the matter. Another person said that “non-revenue-generating” teams would bear the brunt of the lay-offs.An internal announcement about the scale of the job losses would be made next week, two of the people said, with one adding that there was currently a “funeral home atmosphere” inside Diageo’s London head office.The owner of Guinness and Johnnie Walker employs close to 30,000 people worldwide.Since Lewis arrived six months ago, Diageo’s heads of Great Britain, North America and Africa have all left or are in the process of leaving the company, as well as its head of human resources.Diageo has poached Unilever’s UK chief Marc Woodward, a former colleague of Lewis’s, to lead its domestic business. Unilever said: “We thank Marc for his contribution to Unilever and wish him every future success. His successor will be announced in due course.”In February, Diageo shared its intention to “redesign our operating framework to drive sustainable returns for shareholders by delivering a more competitive Diageo”.“We will always prioritise informing our colleagues of any organisational changes first and have committed to update shareholders on our progress at a Capital Markets Day on 6 August.”Diageo investors have so far only been given hints over how Lewis intends to turn around the FTSE 100 company, which has been badly hit by a dramatic downturn in spirits consumption over the past few years.Previously, he signalled his intention to cut prices to win back consumers, an approach that could mark a big departure from the group’s long-running focus on high-end brands.Lewis, nicknamed “drastic Dave” for his record of cost-cutting at Tesco and Unilever, had formulated his restructuring plans at Diageo without the help of consultants, said two of the people.Diageo’s shares slumped almost 13 per cent in February after Lewis announced a dividend cut and gave his initial assessment of the business, arguing the company needed to invest more in mass-market brands to boost growth. At a company-wide town hall meeting in May, Lewis announced a strategic push into ready-to-drink canned cocktails, in a sign of his plans to balance out Diageo’s portfolio with more affordable options for young drinkers. The spirits industry has failed to recover from a multiyear sales decline after producers raised prices aggressively during a pandemic-era boom in consumption. A subsequent decline in drinking has fuelled worries that the drop in sales is a structural issue for the industry, as more health-conscious consumers cut back their consumption.Since peaking at £40 (€46.23) a share in 2022, Diageo’s shares have fallen by more than 60 per cent to £15. – Copyright The Financial Times Limited 2026