Budweiser APAC to Cut Thousands of Jobs in 15% Cost Reduction :

Budweiser Brewing Co APAC Ltd. intends to reduce its headcount by thousands this year as the company attempts to cut costs due to the ongoing weakness in demand for its products, especially in China.

This most recent round of cuts are part of a larger strategy to cut operational expenses by 15% this year, which follows last year’s cost cutting measure when the company sacked 16% of its workforce. Employees from China bear the brunt of these layoffs due to the fact that over 80% of the company's workforce is based there. According to confidential sources, the total number of employees set to be released further increases from last year’s 4,000 figure, which already seems quite astounding.

In the past couple of years, the company has reduced its headcount consistently, with over 30,000 employees in 2017, the figure now stands at an estimated 25,000. The company is expected to reduce its staff size to 25,000 by the end of 2023.

A Budweiser APAC spokesperson sheds light on optimizing Budweiser’s success, stating, “As we refine our operations, we remain committed to nurturing creativity and developing talent within our organization.” He also said, “China has been receiving investments from us for over four decades and we are optimistic about its growth potential while staying attuned to our strategic priorities.”

Budweiser APAC’s layoffs and restructuring demonstrate the shifting reality for Anheuser-Busch InBev and other global beer companies in China, the second largest economy which is undergoing an economic slowdown and a downturn in the property market. This group suffered a net loss of $16 million for the fourth quarter, contrary to the expectation for a profit of $6.72 million. During the entirety of last year, profit reduced by 15% and revenue decreased by 9%, which is what was expected.

Other competitors are also suffering that fate. For Carlsberg, volume and revenue both saw a decline in China last year, which is startling.

To help rejuvenate China performance, Budweiser APAC has appointed company veteran Yanjun Cheng, 29 years with the company, to replace Jan Craps, who is leaving after 7 years in April.

Cheng will have to guide the company against multiple headwinds, one of which is the fading reputation in China This includes a group brand that was well received in Northeastern China that was found to have vomitoxin, which can lead to nausea, diarrhea, and headaches, as reported by Hong Kong’s Consumer Council last year.

These findings were also covered in China by Xinhua News Agency, which reported that Budweiser APAC had persistently infringed the local advertising restrictions. As a group, they have been punished for the breaches by being fined a total of 1.4 million yuan (approximately $200,000) since May 2021, as the report indicates.