Heineken to cut 8,000 jobs as virus takes toll on sales

Dutch brewing giant Heineken said on Wednesday it would cut around 8,000 jobs worldwide as the coronavirus pandemic pushed it into the red.

The world’s number two brewer after Belgian-Brazilian AB InBev will slash nearly 10 percent of its workforce as Covid restrictions keep bars and restaurants closed.

Heineken reported a net loss of 204 million euros ($247 million) for 2020, compared with a net profit of 2.1 billion euros a year earlier, while sales fell 17 percent to 23 billion euros.

Heineken CEO 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 two billion euros of savings by 2023.

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“The Covid-19 pandemic and governments’ measures continue to have a material impact on our markets and business,” Heineken said in a statement.

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”, it said.

The brand grew double-digits in 25 markets including Brazil, China and Britain, it added.

The zero-alcohol Heineken 0.0 was a rare bright spot, with single digit growth globally.

‘Impact of pandemic’

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.

Like the rest of the drinks industry, Heineken has suffered from the widespread closure of drinking holes around the world, its CEO said.

“The impact of the pandemic on our business was amplified by our on-trade (bars, cafes and restaurants) and geographic exposure,” said van den Brink.

Less than 30 percent of outlets were operating in Europe, in particular at the end of January, it said.

The brewer said that as vaccines were slowly rolled out it expected further problems in the first half of this year, then for “conditions to gradually improve” in the second.

Heineken had announced in October that restructuring was needed to reduce personnel costs but gave no figure for layoffs at the time.

The company employs around 85,000 people globally.

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“The overall restructuring programme will reduce our employee base by (about)8,000 people,” Wednesday’s statement said.

This includes cutting jobs at the head office in Amsterdam while other layoffs would depend on local circumstances, it added.

Heineken’s reshaping plan includes a focus on its iconic green-bottled namesake brand, plus “fewer, bigger bets in local premium brands”, it said

The brewer, founded in the 19th century in Amsterdam, now sells more than 300 brands worldwide.

The company said it would also focus on no-alcohol options and push into “hard seltzers” — alcoholic soft drinks.

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