With beer sales struggling in China, the brewing giant plans to axe thousands of jobs to cut costs
Budweiser Brewing Co APAC Ltd is planning to eliminate thousands of jobs this year to reduce costs amid weakening consumer demand in China, Bloomberg News has reported.
Budweiser Brewing Co APAC, part of Anheuser-Busch InBev, is targeting a 15% reduction in operational expenses this year, following last year’s cut of approximately 16% of its 25,000 workforce, according to sources cited in the Bloomberg report.
The forthcoming job cuts would mean thousands more employees will also exit the company this year after about 4,000 were laid off in 2023. The brewer has steadily trimmed staff numbers over recent years, with total employment down about 20% at the end of 2023 from a peak of more than 30,000 in 2017.
China, which accounts for more than 80% of Budweiser APAC’s workforce, will experience the majority of these cuts.
Budweiser APAC’s downsizing underscores broader challenges confronting global brewers in China’s slowing economy, where consumer spending has weakened due to economic headwinds and a prolonged slump in the property market.
Budweiser APAC posted a fourth-quarter net loss of US$16 million for last year, significantly underperforming analysts’ expectations of a US$6.72 million profit. Annual profits plunged 15%, while revenue fell 9% year-on-year. Rivals, such as Carlsberg, have also encountered similar difficulties, recording lower volumes and revenue in China.
To bolster its recovery efforts, Budweiser APAC recently appointed company veteran Yanjun Cheng, with 29 years of experience, as the new leader effective April, replacing outgoing CEO Jan Craps. Cheng faces a few hurdles in reviving Budweiser’s position in China beyond just its weakening economy. Last year, Hong Kong’s Consumer Council revealed contamination with vomitoxin—a toxin causing nausea and headaches—in one of its popular northeastern China beer brands.
Additionally, Budweiser APAC faced penalties totalling about CNY1.4 million (US$194,000) since May 2021 due to repeated violations of Chinese advertising laws, which were extensively covered in China’s official media.
