Heineken to axe jobs after profits plunge
Heineken will slash its workforce by a fifth after profits plunged following the widespread closure of pubs and bars during the pandemic.
The brewing giant, which employs 85,000 people worldwide, said the job losses will take place across its head and regional offices next year where about 1,700 staff are employed. The cuts will not affect the brewer's UK workforce, Heineken said.
It comes as the group looks to slash costs across its offices amid uncertainty caused by the coronavirus crisis.
Heineken, which also owns Birra Moretti, Amstel and Tiger beer, suffered a 76pc plunge in profits to €396m (£358m) in the nine months to September compared with the same period last year.
The group said it could not provide a reliable outlook for the rest of the year as it warned of a volatile final quarter amid fresh restrictions being imposed by many countries in Europe.
In Asia, new restrictions are in place in Malaysia, Myanmar and Sri Lanka.
Dolf van den Brink, chief executive, said: "The situation remains highly volatile and uncertain. We expect rolling outbreaks of Covid-19 to continue to meaningfully impact many of our markets in addition to rising recessionary pressures."
Heineken’s beer volumes dropped by 1.9pc on a like-for-like basis in the third quarter, beating analyst expectations.
The fall was most prominent in the Asia-Pacific region, where sales fell 12.3pc due to price increases and Covid-19 restrictions in Vietnam.
Sales in Africa, the Middle East and Eastern Europe dipped 2.5pc as a five-week alcohol ban in South Africa and high price increases in Ethiopia due to duty hikes.
In the Americas, beer volumes were up 2.5pc, but Europe declined 2.4pc following falls in the UK, Spain and the Netherlands.
Heineken said there were some recent green shoots in beer consumption, with British drinkers consuming a tenth more in the past three months than the same period a year earlier.
Global sales of Heineken's flagship brand rose 7.1pc in the third quarter, with double-digit growth in the UK, Brazil, China, the USA, Nigeria, Singapore, and Poland.
But Heineken said restrictions on pubs and restaurants and the subsequent consumer shift to purchasing beer from shops would hit revenues, while costs were likely to rise with kegs cheaper to produce, reuse and transport than cans and bottles.
The brewer has already reduced discretionary spending and some capital expenditure.
Shares fell 4.6pc in Amsterdam.
