Heineken NV plans to cut 8,000 jobs as the beermaker’s business with bars and restaurants suffers from pandemic-related lockdowns.
The staff reductions, which amount to almost a 10th of the workforce, are part of a target for 2 billion euros ($2.4 billion) in gross savings through 2023, Heineken said Wednesday. About a fifth of jobs at the brewer’s headquarters are set to be eliminated in the first quarter of this year.
“On the productivity side, we need a bit more of an intervention, and that shouldn’t stop in 2023,” Chief Executive Officer Dolf van den Brink said by phone.
The world’s second-largest brewer after Anheuser-Busch InBev NV outlined additional strategic initiatives under its turnaround program launched last year, including targeting an operating margin of 17% by 2023. That would bring the measure of profitability into line with levels achieved before the pandemic.
The shares fell as much as 2.1% in early trading in Amsterdam. The stock declined 6% in 2020.
The results mark the CEO’s first year at the helm — a baptism of fire given the impact of the coronavirus on pubs and the mass-market beer industry. In Europe, Heineken estimates that about a third of the bars it sells to were closed during 2020. Heineken had announced job cuts last autumn, without putting a number on the reductions.
Sales last year fell 11.9% on an organic basis, more than the 10.9% decline analysts expected.
The brewer expects business conditions to start improving in the second half of 2021. Last week, rival Carlsberg A/S said earnings would grow between 3% and 10% but noted the guidance, which the company is legally required to provide, was extremely uncertain.