Diageo CEO Dave Lewis on 6 August 2026 unveiled a sweeping turnaround plan to nearly double Guinness production capacity while cutting a "significant" proportion of the company's roughly 30,000-strong workforce. The strategy pairs aggressive cost reduction with a concentrated bet on the drinks giant's most iconic brand, sending shares up more than 6% in afternoon trading. The Guardian

Lewis, the former Tesco chief executive appointed to Diageo's board in November 2025 and to the CEO role effective 1 January 2026, told investors the restructuring aims to deliver $1bn in annual savings over two years at a total cost of $1.2bn. Employee severance charges alone are expected to reach $514m (£382m). The announcement confirmed what Reuters had reported two weeks earlier: that some Diageo teams were already cutting 20% to 30% of staff after Lewis ordered deep reductions in overheads. The Guardian; Reuters

On the growth side, Diageo plans a $1bn investment in Guinness to expand global sales, with a particular focus on North America, and to prevent a recurrence of the UK shortages that plagued the brand. Production capacity is targeted to rise from 8.2 million hectolitres today to 15.7 million by 2031. This builds on the May 2026 opening of the Littleconnell Brewery in County Kildare, Ireland, part of a near-€1bn commitment to the country that created approximately 650 construction jobs. The Guardian; Diageo

Lewis firmly ruled out selling Guinness, extinguishing City speculation that a divestment could raise up to £8bn. He went further, stating the company would not "hawk" its brands, would not actively divest less well-performing labels, and was not seeking acquisitions. The decision to retain the full portfolio marks a clear strategic choice: Diageo will instead reposition around a broader range of offerings, including mid-market brands and smaller pack sizes suited to cost-conscious consumers. The Guardian

The plan also addresses what Lewis identified as Diageo's failure to capitalise on the ready-to-drink category, including premade cocktails and "gin in a tin" products. That segment has grown rapidly across the industry, and Diageo's lag here has been a visible gap in its portfolio strategy. The Guardian

The announcement accompanied full-year results showing a decline in sales but a slightly better-than-expected operating profit. That follows a difficult February 2026, when Diageo warned that organic sales for the year would fall by 2% to 3%, halved its interim dividend to 20 cents per share, and set a lower payout ratio amid faltering US demand. The Guardian; Reuters

The broader context here is one of a new CEO moving with deliberate speed to arrest a deteriorating financial trajectory. Lewis inherited a company under pressure on multiple fronts: softening US demand, a squeezed mid-market, and an underexploited RTD category. The February dividend cut was an early signal of severity; the August plan is the structural response. Investors appear to have rewarded the clarity of intent, though the $1.2bn restructuring cost against a $1bn annual savings target leaves a narrow margin for execution error, and the workforce reductions, while welcomed by the market, carry operational and reputational risks for a company whose brands depend on cultural goodwill.

The Guinness bet is the plan's centrepiece and its highest-stakes wager. Doubling capacity over five years is a capital-intensive commitment predicated on sustained global demand growth, particularly in North America, where dark stout has historically occupied a niche rather than a mainstream position. Lewis is doubling down on the brand he refused to sell, and the market's 6% rally suggests investors, at least initially, are willing to back that conviction.