Heineken to trim its workforce by 7%, commences major restructuring in S.A
Following the ban imposed on the production, sales, and distribution of alcohol in South Africa, Heineken has announced that the company will trim its workforce by 7%.
The Company announced: “In line with a global review by the Heineken company of its organization, and in light of the continued market pressure in South Africa, we now find it necessary to restructure our operations in South Africa to build a high performing business fit for the future given the significant impact the COVID-19 pandemic has had on our business in the past year.”
“Unfortunately, this review will mean that we need to reduce the number of employees across some roles. Heineken South Africa employs just under 1 000 full time employees and through this process, will reduce the total workforce by approximately 7%,” Heineken stated.
In an industry where 165,000 people have already lost their jobs with a further 100,000 moving into poverty, Heineken becomes the first major company in the country to cut jobs due to the ban on sale of booze. The brewer says given the continued market pressure in South Africa, it became necessary to restructure its operations and reverse some of the effects of COVID-19 pandemic.
The Company also confirmed it was stopping its R6billion project in South Africa. Glass manufacturing company, Consol Holdings limited announced the suspension of a 1.5 billion-rand production plant in the country.
Heineken’s major competition, South African Breweries, a subsidiary of Anheuser-Busch InBev also revealed that the company has suspended commitments to retain workers and investments, agreed as part of its merger with Anheuser-Busch InBev, due to the country’s decision to ban alcohol sales to curb the coronavirus and additionally halted plans to spend 5 billion rand on scheduled plant upgrades.
The conditions of the $106 billion merger requires SAB to maintain an aggregate headcount of 5,967 workers in South Africa and that AB InBev make a 1 billion rand ($65.62 million)investment in the country in five equal instalments of 200 million rand over a period of five years from the merger agreement.
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