Anheuser-Busch InBev to cut 1,400 jobs
About 75 percent of the affected positions are based at the brewer’s corporate headquarters in St. Louis, at downtown offices or at its Sunset Hills campus, while other reductions will occur in field and brewery locations.
09/12/08 Anheuser-Busch InBev has announced that, as part of its previously announced plans to effectively integrate Anheuser-Busch Inc., the U.S. business unit today communicated plans to cut approximately 1,400 U.S. salaried positions in its beer-related divisions, affecting about 6 percent of the company’s total U.S. workforce.
About 75 percent of the affected positions are based at the brewer’s corporate headquarters in St. Louis, at downtown offices or at its Sunset Hills campus, while other reductions will occur in field and brewery locations. In addition, more than 250 U.S. positions that are currently open will not be filled. An additional 415 contractor positions will be eliminated. Most of the reductions will occur by the end of this year, with the remainder taking effect next year.
“To keep the business strong and competitive, this is a necessary but difficult move for the company,” said David A. Peacock, president of Anheuser-Busch. “We will assist in the transition for these employees as much as possible. The people of Anheuser-Busch dedicate themselves to the business, and we appreciate all of their contributions.”
The company will provide employees severance pay and pension benefits based on age and years of service. Employees also will be offered additional benefits during the transition, including outplacement services.
The announced workforce reductions are in addition to the more than 1,000 U.S. salaried employees company-wide who accepted the company’s voluntary enhanced retirement program, which closed November 14 and provided special benefits for eligible employees retiring by the end of 2008. The retirements were part of planned cost reductions of 1 billion USD, called project Blue Ocean, announced by Anheuser-Busch in June 2008. At that time, the company announced plans to reduce its company-wide U.S. full-time salaried workforce of 8,600 by 10 to 15 percent before the year end. The company’s other Blue Ocean cost reductions remain on track.
Bargaining unit employees at the company’s 12 U.S. breweries are unaffected by the reductions announced today. “Managing our costs is important in building and maintaining a successful business, especially in a challenging economy,” said Peacock. “We are pleased with our U.S. beer sales, we will continue to invest in growing our brands and we will always look for ways to become more efficient. Decisions like this are never easy, but they will ensure the long-term success for Anheuser-Busch and our employees.”
The company anticipates that the aggregate pre-tax expense associated with the reduction will be approximately 197 million USD. Approximately 150 million USD of this expense will arise from severance arrangements with terminated employees and the remainder will arise from enhancements in the pension benefits required by the terms of the defined benefit plan because the terminations are occurring within three years of the change of control of the company. The company anticipates that cash expenditures from the reduction will be
approximately 213 million USD.
The plans are an integral part of the at least 1.5 billion USD in annual synergies identified by InBev when it announced its combination with Anheuser-Busch in July. The company is confident in its ability to achieve against this synergies projection by 2011.
Going forward, in addition to the priority to continue to grow the top line, Anheuser-Busch InBev will focus on its goals of integrating the businesses, delivering the expected synergies and deleveraging the company.
