Heineken cuts 8,000 jobs because it moves ‘beyond beer’

Heineken cuts 8,000 jobs because it moves ‘beyond beer’

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The brewery of Moretti and Amstel said in a statement of earnings on Wednesday that it would reduce almost 10% of its global workforce and seek savings of € 2 billion ($ 2.4 billion) in two years’ time as part of a refurbishment. to improve efficiency.

The restructuring will cost approximately € 420 million ($ 509 million) and reduce the cost of head office staff by 20%. Regional offices and local operations will also be affected.

Heineken (HEINY) showed a net loss of € 204 million ($ 247.6 million) in 2020, compared to a profit of € 2.2 billion ($ 2.7 billion) the previous year. Revenue fell 16.7% to € 23.8 billion ($ 28.9 billion) amid the closure of restaurants and bars in key markets, as well as other restrictions on social gatherings and alcohol sales.

“The impact of the pandemic on our business has been strengthened by our trade [pubs, bars and restaurants] and geographic exposure, “said CEO Dolf van den Brink, who took the lead in June last year.

Heineken estimates that at the end of January less than 30% of pubs and restaurants in Europe were operating, which is the largest market. Many countries in the region reintroduced closures in December and have since tightened restrictions. Heineken said it had written off € 191 million ($ 231.6 million) at various UK pubs.

As more alcohol consumption occurs at home, Heineken’s direct-to-consumer platforms, including Beerwulf, Six2Go and Drinkies, tripled their orders last year. Online sales of its home systems grew in the middle of the double digits.

Yet beer sales fell by 8.1% by 2020 volume. However, Heineken sold more non-alcoholic beverages, powered by Heineken 0.0 and Maltina in Nigeria. The company said that the segment has ‘a lot of potential for growth’ and that it intends to make non-alcoholic beer available everywhere.

Budget beer and spiked seltzer dominated during the pandemic

The group is also filling up sparkling water with hard seltzer-flavored drinks. Heineken launched products in this category in Mexico and New Zealand last year, with more launches in 2021. In the United States, the partnership with the liquor brand Arizona was formed to introduce Arizona Sunrise Hard Seltzer.

Van den Brink said that Heineken’s strategic review will take advantage of existing strengths and new opportunities to ‘map out our next chapter of growth’.

“We strive to deliver superior and profitable growth in a rapidly changing world,” he added.

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