Heineken CEO targets 8 000 job cuts

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Heineken CEO targets 8 000 job cuts

10:48 CAT | 11 Feb 2021

Image: Bloomberg

The world’s second-largest brewer after Anheuser-Busch InBev NV outlined additional strategic initiatives under its turnaround program launched last year

Heineken NV plans to cut 8 000 jobs as the beermaker’s business with bars and restaurants suffers from the impact of pandemic-related lockdowns.

The staff reductions, which amount to almost a 10th of the workforce, are part of a target for 2 billion euros ($2.4 billion) in gross savings through 2023, Heineken said in a statement Wednesday.

“We really believe there’s an amazing value-creating opportunity out there, but on the productivity side, we need a bit more of an intervention, and that shouldn’t stop in 2023,” Chief Executive Officer Dolf van den Brink said by phone.

The world’s second-largest brewer after Anheuser-Busch InBev NV outlined additional strategic initiatives under its turnaround program launched last year, including targeting an operating margin of 17% by 2023. That would be consistent with margins achieved before the coronavirus emerged.

Also read: New brewery may create thousands of jobs

The results mark the CEO’s first year at the helm — a baptism of fire given the impact of the coronavirus on pubs and the mass-market beer industry. In Europe, Heineken estimates that about a third of the bars it sells to were closed during 2020.

Sales last year fell 11.9% on an organic basis, more than the 10.9% decline analysts expected.

The brewer expects business conditions to start improving in the second half of 2021. Last week, rival Carlsberg A/S said earnings would grow between 3% and 10% but noted the guidance, which the company is legally required to provide, was extremely uncertain.

Heineken had announced job cuts last autumn, without putting a number on the reductions.