Carlsberg to cut white-collar jobs
CARLSBERG said yesterday it was cutting 2,000 white-collar jobs as the Danish brewing giant tries to come to grips with a shrinking Russian beer market.
CARLSBERG said yesterday it was cutting 2,000 white-collar jobs as the Danish brewing giant tries to come to grips with a shrinking Russian beer market.
Estimating that “profit development of recent years has not been satisfactory”, CE Cees ’t Hart announced “further steps to prepare the Carlsberg Group for the future”.
Chief among them are increasing organisational efficiency, which allows the brewer — whose brands include Tuborg and Grimbergen — “to reduce white-collar headcount by approximately 2,000 employees”, the company said.
The cull of 15% of white-collar staff comes as the company announced nearly 10-billion Danish kroner in restructuring charges and reductions in the value of its assets. Most were booked in the third quarter, pushing its net loss to 4.45-billion Danish krone ($0.64bn), compared with a profit of 2.10billion kroner one year ago.
Much of the charges were owing to Carlsberg’s Baltika Brewery in Russia, where the beer market has gone flat after the government took measures to tackle alcoholism. The measures have included a crackdown on marketing and banning the sale of beer in kiosks and late at night.
“We have now concluded that the difficult market challenges will persist for the next few years and, consequently, that the decline of the beer category will continue” in Russia, Carlsberg said. Deliveries were down 18% compared with the same quarter last year.
While it still expects to turn operational profits in Russia, Carlsberg said it would need to restructure its production network and write down the value of assets to the tune of 5-billion krone, part of which it booked in the third quarter.
The company also plans to take 4-billion krone in charges in China, where it sees turning operational losses for the foreseeable future as its local brands fail to perform as expected and efficiency improvements have remained elusive.
Despite the problems in certain markets, sales still increased 1% to 18.3-billion krone, which Mr Hart described as a “solid performance”. A 17% jump in sales for its premium brand Tuborg and a 16% for Grimbergen helped sustain overall sales growth.
Carlsberg said its streamlining efforts should deliver annual benefits of between 1.5billion and 2.0-billion krone by 2018.
The company’s brewer’s shares jumped 7.8% to 597.5 krone in a market up 1.2% overall.
We have now concluded that the difficult market challenges will persist for the next few years