Budweiser Brewing Company APAC, the Asian subsidiary of Belgian brewing giant AB InBev, is set to eliminate thousands of jobs this year as part of a cost-cutting strategy, sources familiar with the matter told Bloomberg.
The job cuts come as the company faces mounting economic pressures in China, its largest market in the region. The slowdown in consumer spending, coupled with broader economic challenges, has significantly affected the brewer’s financial performance.
Massive Workforce Reductions
According to sources, Budweiser APAC is aiming to reduce operational costs by approximately 15%. The workforce reduction is expected to hit China the hardest, where about 80% of the subsidiary’s employees are based.
Last year, the company already slashed around 4,000 jobs from its workforce of 25,000. With the latest cost-cutting measures, the total number of layoffs could reach several thousand more in 2024. The move reflects the broader difficulties faced by multinational beverage companies in China’s struggling market.
Budweiser APAC has been on a downsizing trajectory for years. In 2017, the company had over 30,000 employees, but the latest cuts will push its workforce well below that figure.
Financial Struggles and Market Challenges
The decision to scale back operations follows a disappointing financial performance in 2024. Budweiser APAC reported a net loss of $16 million (€14.7 million) in the fourth quarter. Full-year profits dropped by 15%, while revenue declined by 9%.
The Chinese beer market has become increasingly difficult for international brands. Economic growth in China has slowed, and the ongoing real estate crisis has reduced disposable incomes, making consumers more cautious about spending. Domestic brewers and craft beer brands have also intensified competition, further straining Budweiser APAC’s market share.
Leadership Change Amid Downsizing
In a bid to stabilize its operations and revamp its China strategy, Budweiser APAC has announced a leadership change. Jan Craps, the Belgian executive who has led the company since 2019, will step down as CEO on April 1. He will be succeeded by Yanjun Cheng, who is expected to steer the company through the ongoing restructuring efforts.
Despite the job cuts and financial downturn, Budweiser APAC remains committed to the Chinese market. The company is likely to continue making adjustments to its business model in an effort to regain profitability.
Industry-Wide Challenges
Budweiser APAC is not alone in facing economic headwinds. The beer industry in China has been struggling with declining sales, and other global beverage companies have also been forced to reassess their strategies in the region. The shift in consumer behavior, coupled with inflationary pressures, has made it difficult for foreign brewers to maintain their previous growth levels.
While Budweiser APAC’s restructuring efforts may help streamline its operations, the success of these measures will largely depend on China’s broader economic recovery and consumer demand trends.
