Diageo shed more than 2,000 employees in its past financial year, after chief executive Dave Lewis kicked off a major restructure at the Guinness brand owner, its annual report has revealed.
The maker of Smirnoff, Johnnie Walker and Captain Morgan had an average of 27,938 full-time employees in the year to June, down 6% from the 29,860 workers it had a year ago. Despite this, overall staff costs at Diageo climbed from $2.48bn to $2.55bn over the period.
Speaking to media earlier this month, Lewis refused to put a number on the reduction in employee headcount targeted as part of his bid to revive the fortunes of the world’s largest spirits player.
“I don’t want to talk about a number,” he said. “I don’t think that’s the right way for me to be talking about colleagues who are impacted by this change. In Europe we’re still in consultation, so it would be inappropriate [and] I don’t even have that final number.”
Severance costs at Diageo in the year to 30 June 2026 totalled $514m, according to the company’s full-year results.
Dave Lewis pay packet
Meanwhile, Lewis could make as much as £20m if he is able to meet annual and long-term targets as Diageo boss, as well as driving a 50% recovery in the Guinness maker’s share price.
Lewis was appointed as Diageo’s new chief executive on 1 January on a base salary of £1.5m per year. This was slightly above the £1.35m base salary awarded to his predecessor Debra Crew, reflecting his “extensive executive experience”, Diageo said.
“Sir Dave’s remuneration package on joining comprised a base salary of £1.5m, with maximum annual bonus and long-term incentive opportunity set in line with the current policy at 200% and 500% of salary respectively,” Diageo said in its annual remuneration report. “No one-off awards or buy-out arrangements were made to Sir Dave in relation to this appointment.”
But Lewis could earn a significantly higher payout, provided he can arrest the slide in Diageo’s sales and share price. An ‘on target’ performance will see the former Tesco and Unilever boss make £9.4m in salary and bonuses in FY27, according to Diageo forecasts.
However, as stretching targets will be measured over a three-year performance period, the full value of Lewis’ pay packet for FY27 will not be realised until FY29.
Meanwhile, if Lewis can achieve a ‘maximum’ scenario set out by Diageo, he will receive fixed remuneration, plus full payout of annual and long-term incentives totalling £15m in FY27, realised in FY29.
Finally, a ‘maximum plus share price growth’ scenario would take the total value of Lewis’s FY27 take-home to over £20m, assuming a 50% share price appreciation over the three-year performance period.
Diageo CFO Nik Jhangiani has a similarly performance-linked pay structure, and could take home between £1.1m and £10.6m, depending on progress against annual and long-term incentives, and Diageo’s share price recovery over the next three years.
Jhangiani was paid a pro-rata salary supplement of £300k for the period he served as Diageo’s interim CEO between 16 July 2026 and 31 December 2025. His take-home in FY26 was £2.6m, making him the most well-remunerated Diageo employee over the period.
A Diageo spokesperson said: “Against the backdrop of a challenging operating environment for our sector, our proposed remuneration policy is designed to both retain and attract the highest quality leadership required to deliver our new strategy, a turnaround in key markets, and improve our financial performance to deliver long term value for shareholders.”
Lewis unveiled his turnaround plan for Diageo at the group’s capital markets day in London earlier this month.
The plan includes investing $1.2bn in redesigning its operating framework and supply chain model to deliver $1bn in cost savings over the next three years.
It comes after Diageo sales declined organically by 2% in the year ended 30 June 2026.
Diageo shares are currently trading at £16.85, down 58% from a post-pandemic peak of £40.18 in January 2022.
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