New CEO To Cut 8,000 Jobs As Heineken Feels Pandemic Effect

today02/10/2021 1

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New CEO To Cut 8,000 Jobs As Heineken Feels Pandemic Effect

Via Reuters:

Heineken NV plans to cut about 8,000 jobs, the Dutch beer group said on Wednesday, seeking to restore operating margins to pre-pandemic levels after a sharp decline in profit because of coronavirus restrictions.

The world’s second-largest brewer, which makes Europe’s top selling lager Heineken as well as Tiger and Sol, said it would save 2 billion euros ($2.4 billion) over the three years to 2023 under CEO Dolf van den Brink’s “EverGreen” plan.

Savings will be achieved by redesigning its organisation, reducing the complexity and number of its products and identifying its least effective spending, Heineken said.

The review of its operations will result in about 8,000 job losses – equating to 9% of its workforce at the end of 2019 – and a related 420 million euro charge. Personnel expenses will be cut by about 350 million euros, it added.

The brewer said ongoing restrictions on social gatherings and hospitality venues meant 2021 revenue, operating profit and operating profit margin would be below levels in 2019.

It expects market conditions to improve gradually in 2021 and more into 2022, with a slow recovery in European bars and restaurants, less than 30% of which were open at the end of January.

The operating profit margin before one-offs should rise to 17% by 2023, the company said, versus 12.3% last year and 16.8% in 2019.

Heineken shares were down 2.2% at 0955 GMT, making them 4.6% weaker in the year to date. Analysts said the cautious 2021 outlook and the fact that large restructuring only brought margins back to 2019 levels weighed on the stock.

“Underwhelming” was the verdict of Bernstein Securities beverage analyst Trevor Stirling of the margin goal.

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Written by: LoneRhody

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