Heineken restructures, trims global workforce by 10%
Global brewer, Heineken will be trimming down its global workforce by 10% which amounts to about 8000 jobs following a huge decline in profit as a result of the pandemic.
According to the company, this move is part of an overhaul designed to improve efficiency and seek savings of €2 billion ($2.4 billion) over two years with the aim of redesigning its organization to make it more efficient and effective, reduce the complexity and number of its products and identify its least effective spending.
Heineken CEO, Dolf van den Brink stated: “The impact of the pandemic on our business was amplified by our on-trade and geographic exposure.”
Heineken reported that as beer sales by volume slipped 8.1% in 2020, the non-alcoholic drinks segment boosted sales driven by Heineken 0.0 and Maltina in Nigeria. The restructuring will cost about €420 million ($509 million) and reduce head office staff costs by 20%; regional offices and local operations will also be impacted.
The company expects market conditions to improve gradually in 2021 and to continue to improve into 2022, with a slow recovery of bars and restaurants in Europe; and also to achieve an operating profit margin before one-offs of 17% by 2023. That compared with 12.3% last year and 16.8% in 2019.
The company also reported a net loss of €204 million ($247.6 million) in 2020, compared with a profit of €2.2 billion ($2.7 billion) the previous year. Revenue tumbled 16.7% to €23.8 billion ($28.9 billion) amid closures of restaurants and bars in key markets, as well as other restrictions on social gatherings and alcohol sales.
Heineken is pinning recovery hopes on its premium products and new, healthier, zero-alcohol options as it aims to become the best digitally connected brewer to serve consumers increasingly looking for beer online.
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