Heineken CEO Targets 8,000 Job Cuts as Pandemic Curbs Sales

Heineken NV plans to cut 8,000 jobs as the beermaker’s business with bars and restaurants suffers from pandemic-related lockdowns.

The staff reductions, which amount to almost a 10th of the workforce, are part of a target for 2 billion euros ($2.4 billion) in gross savings through 2023, Heineken said Wednesday. About a fifth of jobs at the brewer’s headquarters are set to be eliminated in the first quarter of this year.

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

Heineken CEO Targets 8,000 Job Cuts as Pandemic Curbs Sales

The world’s second-largest brewer after Anheuser-Busch InBev NV outlined additional strategic initiatives under its turnaround program 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 shares fell as much as 2.1% in early trading in Amsterdam. The stock declined 6% in 2020.

Sales Miss

The results mark the CEO’s first year at the helm -- a baptism of fire given the impact of the coronavirus on pubs and the mass-market beer industry. In Europe, Heineken estimates that about a third of the bars it sells to were closed during 2020. Heineken 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.

The brewer expects business 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.

©2021 Bloomberg L.P.

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