Heineken will cut 5,000 to 6,000 jobs over the next two years to further reduce costs, the Dutch beer brewer announced with its annual figures on Wednesday. Last year, Heineken generated revenues of nearly €34.3 billion, achieving a net profit of €1.9 billion.According to Heineken, the global workforce cuts will lead to annual cost savings of up to €500 million. The company currently employs over 87,000 people.
Should companies hire people they don’t need?
Yes, there should be unemployment benefits, help with retraining, etc., yes, well-off individuals and companies should be taxed to fund these initiatives - but hiring people to dig useless holes is not a sound social policy, it’s just stupid.
Define need. Companies will happily cut staff they need to save costs. Staff that remain then get the workload dumped upon them. Now everyone is running around half-assing everything at peak stress to try and keep the ship afloat, doing jobs they’re not good at and don’t enjoy poorly because someone didn’t understand someone else’s contribution.
Either the people were redundant (or at least were producing less than they cost) and the company can save costs by firing them, or they were important and productive and it will cost the company money to fire them.
Of course executives can and do make decisions that are bad for the company. In this case, though, that’s quite unlikely, at least on aggregate. Demand for alcoholic beverages is declining, and it’s not easy for a company like Heineken to pivot to non-alcoholic products (demand for non-alcoholic beer is increasing, but not by enough to offset the decrease elsewhere). Moreover, continued automation means fewer people can do the same work.