New Heineken CEO to cut 8,000 jobs due to Pandemic

Heineken NV plans to cut about 8,000 jobs, the Dutch brewing group said on Wednesday, seeking to restore its operating margins to pre-pandemic levels after a sharp drop in profits due to restrictions imposed by the coronavirus.

The world’s second-largest brewer, which produces Heineken – Europe’s best-selling brand – Tiger and Sol, said it would save 2 billion euros ($ 2.4 billion) over three years to 2023 under the “EverGreen “from its CEO, Dolf van den Brink.

The savings will be achieved by redesigning the organization, reducing the complexity and number of its products and identifying its five least effective expenses, Heineken said.

The review of its operations will result in close to 8,000 lost jobs – equivalent to 9% of its workforce at the end of 2019 – and a related charge of 420 million euros. Personnel expenses will be reduced by around 350 million euros, he added.

The brewery said current restrictions on social gatherings and the restaurant and entertainment sector mean that revenue, operating profit and operating profit margin in 2021 would be below 2019 levels.

Brazil and Mexico, two of Heineken’s largest markets, are still struggling to cope with the pandemic.

The company expects market conditions to gradually improve in 2021 and further in 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 extraordinary items should increase to 17% by 2023, the company said, up from 12.3% last year and 16.8% in 2019.

Heineken shares fell 2.2% as of 0955 GMT, accumulating a 4.6% decline so far this year. Analysts said the cautious outlook for 2021 and the fact that a major restructuring only brought margins back to 2019 levels weighed on stocks.

(1 dollar = 0.8249 euros)