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10 Feb 2021 | 08:31

Heineken to cut 8,000 jobs due to pandemic crisis

(Sharecast News) - Dutch drinks group Heineken said it was cutting 8,000 jobs in an attempt to save €2bn over two years and restore margins as the coronavirus pandemic hammered profits.

The redundancies, buried at the bottom of the drinks group's annual results, come as Heineken reported a €204m loss, down from €2.2bn profit a year earlier and with revenues falling 17% to €23.8bn.

Head office staffing costs will be cut by 20%, with those lay-offs to be completed by the end of the first quarter, the company said on Wednesday. Heineken employs 85,000 people.

"The impact of the pandemic on our business was amplified by our on-trade [pubs, bars and restaurants] and geographic exposure," said van den Brink.

"We took diligent cost mitigation actions balanced with continued investment behind our growth platforms. We gained share in most of our key operations, a testimony to our ability to adapt and stay close to our customers and consumers in these turbulent times."

The company aims to return operating profit margins from 12.3% during the past year to 17% by 2023.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said: "With little prospect of drinkers quenching their thirst with a beer at a bar in many of its crucial markets any time soon, the Covid hangover is set to linger a lot longer for Heineken. It's now expecting operating profits and margins to be below 2019 levels this year, with only a slow recovery forecast.

"Heineken's resilience has been hampered by its burdensome debt pile which has limited investment and firepower to deal with ongoing pandemic woes. The reduction in headcount will save around €350m, but with an initial restructuring charge of €420m."
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