Heineken announces thousands of layoffs after a pandemic

the Hague. The Dutch brewer Heineken announced this today will cut about 8,000 jobs, nearly 10% of the global workforce, as part of a plan to cut costs from the blow suffered during the pandemic, which reduced beer sales volume by 8% compared to 2019.

Presenting its annual results, the company explained that it will implement a cost-cutting plan save about 2 billion euros gross until 2023 and expects to reduce total costs with redundancies by 350 million euros.

The company, which employs approximately 85,000 people in various countries, is not yet clear where it will cut those jobs, but estimates that its headquarters will see a 20% reduction in staff costs through the end of the first quarter of 2021.

The results of the company were seen affected by pandemic-related restrictions: the closure of bars and restaurants to ensure social distance, or the total ban on the sale of alcohol in some countries, leaving a total income of 23.770 million euros, 16.7% less than last year.

The The company’s net profit in 2020 was 1,154 million euros, a decrease of 49.4% from 2019, something the company already expected due to the restrictions imposed in key markets, such as Mexico or Brazil, which have been badly affected by the pandemic.

In addition, the currency conversion negatively impacted net income of Euro 1,259 million, 5.3%, driven primarily by the Brazilian real, Mexican peso, Nigerian naira, Russian ruble and South African rand, it reports.

Redesign of the organization

“COVID-19 continues to have a material impact on our frontline performance and impacts all regions and markets as governments around the world have taken steps to reduce contamination, including restricted population displacement, social distance, point of sale closures and temporary closure of production facilities, ”the company stated.

The company too will allocate approximately 420 million euros for the reorganization of the company, which will also mean a more efficient production of its beers, a more frequent use of digital sales channels to reach its consumers and the promotion of premium brands and non-alcoholic beers, at the expense of less effective products and costs.

CEO Dolf van den Brink notes this the company is committed to “superior and profitable growth in a rapidly changing world” and chose to “put customers and consumers first in order to continuously improve and expand its presence”, reinforcing its “focus on continuous productivity improvements”.

The company also celebrated the reduction in water consumption thanks to a plan presented in March 2019. “Ten production points in Mexico, Spain and Egypt added more water to their respective hydrographic basins than was used in their final products through wildlife-based solutions and infrastructure improvement projects,” he said.