By Ahmed Rahma
The Dutch brewing giant, Heineken, has declared that it would reduce its workforce worldwide by 8,000 as sales dropped due to the global pandemic caused b COVID-19.
The world’s number two brewer after Belgian-Brazilian AB InBev made the declaration to slash nearly 10 per cent of it workforce on Wednesday.
Heineken had announced in October that restructuring was needed to reduce personnel costs but gave no figure for layoffs at the time.
In a statement on Wednesday, the company said, “The overall restructuring programme will reduce our employee base by (about) 8,000 people. This includes cutting jobs at the head office in Amsterdam while other layoffs would depend on local circumstances.
“Heineken’s reshaping plan includes a focus on its iconic green-bottled namesake brand, plus fewer, bigger bets in local premium brands,” the statement further said.
Heineken reported a net loss of €204 million ($247 million) for 2020, compared with a net profit of €2.1 billion a year earlier, while sales fell 17 per cent to €23 billion as COVID-19 restrictions keep bars and restaurants closed in some countries where the firm operates.
The company’s CEO, Mr Dolf van den Brink, who took charge last April, said it had been a year of unprecedented disruption and transition for the company.
The Dutchman said the layoffs were part of efforts to reshape Heineken, whose brands include Strongbow and Amstel, targeting €2 billion of savings by 2023.
“The COVID-19 pandemic and governments’ measures continue to have a material impact on our markets and business,” he stated.
The brewer’s beer sales fell 8.1 percent for the year, although its core Heineken brand only dropped 0.4 percent, significantly outperforming the total market. The brand grew double-digits in 25 markets including Brazil, China and Britain.
However, The zero-alcohol Heineken 0.0 was a rare bright spot, with single-digit growth globally.
But other brands had a mixed performance with growth for Desperados tequila-flavoured beer and a slight rise for Birra Moretti, but Amstel and Sol sales were down.
According to the CEO, Like the rest of the drinks industry, Heineken suffered from the widespread closure of drinking holes around the world.
“The impact of the pandemic on our business was amplified by our on-trade (bars, cafes and restaurants) and geographic exposure,” said Mr van den Brink.
Less than 30 per cent of outlets were operating in Europe, in particular at the end of January, he added.
The brewer, founded in the 19th century in Amsterdam, now sells more than 300 brands worldwide and employs around 85,000 people globally.
