Heineken set to shed up to 8 000 jobs

Heineken plans to cut 8 000 jobs in the first quarter of this year as the beermaker’s business with bars and restaurants suffers from Covid-related lockdowns.

The staff reductions, which amount to almost a 10th of the workforce, are part of a target for €2 billion (about R35.5 billion) in gross savings through 2023, Heineken said yesterday.

About a fifth of jobs at its headquarters are set to be eliminated.

“On the productivity side, we need a bit more of an intervention, and that shouldn’t stop in 2023,” chief executive Dolf van den Brink said by phone.

The world’s second-largest brewer after Anheuser-Busch InBev outlined additional strategic initiatives under its turnaround programme 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 results mark Van den Brink’s first year at the helm – a baptism of fire given the impact of the pandemic.

In Europe, Heineken estimates that about a third of the bars it sells to were closed during 2020. The beermaker 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.

Heineken expects 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.

On the productivity side, we need a bit more of an intervention.

Dolf van den Brink CEO of Heineken