Heineken Announces Major Workforce Reduction Amid Market Challenges
Heineken, the Dutch brewing giant, has revealed plans to cut up to 6,000 jobs globally over the next two years, representing nearly 7% of its 87,000-strong workforce. This strategic move comes as the company grapples with declining beer demand and adjusts its financial outlook for 2026.
Financial Forecasts Revised Downward
The world's second-largest brewer by market value has lowered its profit growth projections for 2026, citing "challenging market conditions." Heineken now anticipates slower profit growth of 2% to 6% this year, a reduction from the 4% to 8% growth forecast for 2025. This adjustment follows a 1.2% drop in total beer volumes in 2024 compared to the previous year, with sales particularly weak in Europe and North America.
Reasons Behind the Decline in Beer Consumption
Several factors are contributing to the downturn in beer sales. Squeezed household finances due to the cost of living crisis have led many consumers to cut back on discretionary spending. Additionally, health concerns are prompting some to reduce alcohol intake, while others are altering their diets and lifestyles, partly influenced by the use of weight-loss drugs like Mounjaro and Wegovy.
Job Cuts and Operational Restructuring
The job reductions will affect both brewing and white-collar roles across Heineken's global operations, including positions in Europe and other markets. Harold van den Broek, the company's head of finance, stated that these cuts aim to "strengthen our operations and to be able to invest in growth." Some of the reductions stem from previously announced measures impacting Heineken's supply network, head office, and regional business divisions.
Leadership Changes and Investor Response
This announcement follows the surprise resignation of CEO Dolf van den Brink in January, who will step down in May after six years in the role. Van den Brink had faced pressure from investors to improve growth and productivity with fewer resources. In response to the job cuts, Heineken shares rose by as much as 4% in Amsterdam, reaching their highest level in over six months. Russ Mould, investment director at AJ Bell, noted that investors welcomed the cost-saving measures, which are expected to enhance efficiency.
Future Outlook and CEO Search
Heineken emphasized that the job cuts are intended to "accelerate productivity at scale to unlock significant savings." The company is now under pressure to swiftly appoint a new CEO who can revitalize the beer giant. As the search continues, the incoming leader will inherit a business that has already made tough decisions to navigate the evolving market landscape.
