Dutch Beer company Heineken announced on Tuesday night [January 19] that it would reduce its South African workforce by 7% as a result of mounting pressure related to government-imposed alcohol bans because of the COVID-19 pandemic.
The company halted a R6-billion expansion project in August 2020, according to Fin24, saying it had to restructure its operations in the country because of the impact of COVID-19 on its business in the past year.
“The COVID-19 pandemic has had a material impact on many businesses and markets around the world. It has been particularly devastating for the alcohol industry in South Africa, which has not been able to trade for almost 14 weeks in 2020 and is currently experiencing another ban on the sale of alcohol in 2021,” the company said, according to The South African.
Government has imposed three alcohol bans in South Africa since the onset of the pandemic in a bid to reduce the number of alcohol-related trauma cases that take up much-needed capacity at hospitals
“Unfortunately, this review will mean that we need to reduce the number of employees across some roles,” said the company.
Human resources director, Yvonne Mosadi said it was not an easy decision to retrench 70 of the company’s 1000 employees.
“Prior to considering this action, the company implemented various cost mitigation measures throughout 2020,” she said.”Unfortunately, given the ongoing challenging situation the company finds itself in, these measures are no longer adequate to manage and sustain the operating costs of the business.”
Heineken products, whose local brands include Windhoek, Amstel and Soweto Gold, have been available in the country for many years but it has only been operating as an independent entity since 2016.
The company said it will review its cost and organisational composition periodically in order to make sure its business is sustainable during these uncertain times.
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