Heineken to cut jobs in 2021 despite relative volume increase in Q3

Heineken has announced that it will cut jobs at its head and regional offices in 2021, despite beer volume sales improving in the third quarter, relative to Q2.

Heineken’s net profit for the first nine months of the year was €396 million, down 76% when compared to the €1.66 billion figure recorded for the same period in 2019, as bar and restaurant closures in several markets affected volume sales.

Beer volume sales declined organically by 1.9% in the third quarter, an improvement relative to the previous quarter across all regions, and declined 8.1% for the first nine months of the year.

Despite the overall year-on-year volume decline, volume sales for the company’s flagship Heineken brand actually increased 7.1% in the third quarter.

While the company reiterated its commitment to making no job cuts through 2020, Heineken announced that it would be cutting jobs at its head and regional offices as part of a cost-saving exercise. The cuts will begin in early 2021, and the company anticipates “an expected reduction of around 20% in related personnel costs.”

While the company observed a slight recovery in sales over summer, the company has predicted that the fourth quarter will bring continued volatility, as Covid-19 cases are already rising in many markets, with further restrictions to the on-trade likely to be imposed by governments in markets around the world.

Dolf van Den Brink, Heineken CEO and chairman of the executive board, said: “Our performance during the third-quarter continued to be impacted by the Covid-19 crisis. As many lockdowns eased our volumes improved sequentially compared to the last quarter.

“We outperformed the category across most of our key markets, with Heineken showcasing a stellar performance. We continued strict cost mitigation actions whilst balancing investments behind our brands and future growth opportunities.

“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.”