Heineken announces thousands of layoffs after the pandemic hit

Hague. Dutch brewer Heineken announced today that will eliminate about 8,000 jobs, almost 10% of the world’s workforce, as part of a cost-cutting plan due to the pandemic hit, which reduced beer sales by 8% compared to 2019.

In presenting its annual results, the company explained that it will implement a reduction plan save about € 2 billion gross by 2023 and expects to reduce its total redundancy costs by 350 million euros.

The company, which has about 85,000 employees in various countries, does not yet know where it will cut these jobs, but estimates that headquarters will reduce staff costs by 20% by the end of the first quarter of 2021.

The company’s results have been seen hit by pandemic restrictions: the closure of bars and restaurants to guarantee social distance or a total ban on the sale of alcohol in some countries, which left a total revenue of 23.770 million euros, 16.7% less than the previous year.

The company’s net profit in 2020 was 1,154 million euros, a decrease of 49.4% compared to 2019, something the company already expected due to restrictions applied in important markets, such as Mexico or Brazil, which were severely affected by the pandemic.

In addition, the currency conversion negatively affected net income by 1.259 billion euros, 5.3%, determined mainly by the Brazilian real, the Mexican peso, the Nigerian naira, the Russian ruble and the South African line, it is detailed.

Organizational redesign

“COVID-19 continues to have a material impact on our front-line performance, affecting all geographies and markets, as governments around the world have taken steps to mitigate the contagion, including restricted population movement, social distancing, point-of-sale closure and temporary closure of production facilities “, the company argued.

Also the company will allocate approximately 420 million euros to the reorganization of the company, which will also mean more efficient production of its beers, more frequent use of digital sales channels to reach its consumers and the promotion of premium brands and non-alcoholic beer, to the detriment of less efficient products and costs.

CEO Dolf van den Brink mentioned that the company aims to “ensure superior and profitable growth in a rapidly changing world” and opted to “put customers and consumers at the center to continuously improve and expand” its presence, intensifying “the focus on continuous productivity improvements”.

The company also celebrated the reduction of water use due to a plan presented in March 2019. “Ten production sites located in Mexico, Spain and Egypt supplied more water to the respective river basins than were used in their final products through solutions based on nature and infrastructure improvement projects, ”he said.