Heineken makes rigorous job cuts

Beer brewer Heineken is cutting 8,000 jobs worldwide, which equates to almost 10% of its total workforce. The restructuring is part of the group’s programme to save €2 billion in costs over the next three years. Heineken revealed the plans in the second week of February when announcing its annual results.

Heineken has been hit hard by the COVID-19 pandemic and in particular by the enforced closure of bars and restaurants for much of the past year. In 2020, the brewery group’s net turnover fell by almost 12% to €19.7 billion, resulting in a net loss of €204 million.

Smaller product range

Higher beer sales in the retail channel could not compensate for the revenue losses in the lucrative food service channel. The outlook remains bleak since many hospitality outlets are still shut, so Heineken does not expect to see a recovery until the second half of this year at the earliest.

In addition to scrapping 8,000 jobs, the brewer also announced that it will reduce its product range and cut production and logistics costs in order to achieve its cost-savings target of €2 billion. These measures come on top of Heineken’s restructuring plans at its head office.

Flexibility is essential

In the Dutch financial newspaper Het Financieele Dagblad, Dolf van den Brink, Heineken’s new CEO, is quoted as saying that flexibility is essential: “Ultimately, it’s not the biggest or strongest companies that survive, but the most flexible. (…) Heineken had become accustomed to success. Until February last year, business was booming. The danger is that it makes you less flexible. Your approach works, so you stick to it. We now have to break away from that.”