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.
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.