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Home » Trending » Business » Heineken to cut 8,000 jobs, move ‘beyond beer’ to offset COVID-19 losses

Heineken to cut 8,000 jobs, move ‘beyond beer’ to offset COVID-19 losses

The brewer, which is pushing to dominate the Nigerian market, will cut personnel expenses by about 350 million euros.

The company is seeking to restore operating margins to pre-pandemic levels after a sharp decline in profit because of coronavirus restrictions.

The world’s second-largest brewer, which makes Europe’s top selling lager Heineken as well as Tiger and Sol, said it would save two billion euros (2.4 billion dollars) over the three years to 2023 under new CEO Dolf van den Brink’s “EverGreen” plan.

Savings will be achieved by redesigning its organisation, reducing the complexity and number of its products and identifying its least effective spending, Heineken said.

The review of its operations will result in about 8,000 job losses, about nine per cent of its workforce at the end of 2019 and a related 420-million-euro charge.

Personnel expenses will be cut by about 350 million euros, it added.

The brewer said ongoing restrictions on social gatherings and hospitality venues meant 2021 revenue, operating profit and operating profit margin would be below levels in 2019.

It expects market conditions to improve gradually in 2021 and more into 2022, with a slow recovery in European bars and restaurants, less than 30 per cent of which were open at the end of January.

The operating profit margin before one-offs should rise to 17 per cent by 2023, the company said, versus 12.3 per cent in 2020 and 16.8 per cent in 2019.

Heineken shares were down by 2.2 per cent at 0955 GMT, making them 4.6 per cent weaker in the year to date.

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