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News AB InBev lays off nearly 400 employees in its "The High End" division

Discussion in 'Beer News & Releases' started by WV_Charles_Homebrew, Sep 7, 2017.

  1. WV_Charles_Homebrew

    WV_Charles_Homebrew Initiate (131) May 17, 2017 West Virginia

    http://beerstreetjournal.com/anheuser-busch-the-high-end-layoffs/

    https://www.brewbound.com/news/2017...orkforce-hundreds-high-end-employees-impacted
     
  2. Tamarack

    Tamarack Initiate (116) Sep 22, 2016 Massachusetts

    Yiiiiiiiikes, who saw this coming?
     
  3. grantcty

    grantcty Initiate (87) Feb 17, 2008 Minnesota

    This seems like it was AB-InBev employees, not those at the purchased breweries:

    "Beer Street Journal is told that employees that work directly for breweries purchased for Anheuser-Busch’s High End portfolio – Goose Island, 10 Barrel, Elysian, Blue Point, Wicked Weed, Four Peaks, Breckinridge, and Karbach, will retain their positions at the respective breweries."
     
    jdell15, LuskusDelph and drtth like this.
  4. WV_Charles_Homebrew

    WV_Charles_Homebrew Initiate (131) May 17, 2017 West Virginia

    Its pretty brutal. The article says that employees at acquired breweries will retain their positions, but that could just be "PR speak."
     
  5. NeroFiddled

    NeroFiddled Poo-Bah (8,943) Jul 8, 2002 Pennsylvania
    Beer Trader

    I think that it's mainly sales reps and management who've been let go, which would make sense. As an example only, no real figures, if you had 8 breweries that had one sales person each selling their beer you'd have 8 sales people. But if you now have a combined portfolio of 8 breweries that just 1 person can sell you only need 1 sales person. The same goes for management; redundancy. The brewers themselves should be safe though, at least until they start upgrading/streamlining the breweries or combining them. Keep I'm mind, however, the brewers are not making that much money unless they're at the top of the heap. I'm sure @jesskidden can chime in on what the average salary is, but I assure you it's not a lot.
     
    #5 NeroFiddled, Sep 7, 2017
    Last edited: Sep 7, 2017
  6. drtth

    drtth Poo-Bah (3,219) Nov 25, 2007 Pennsylvania

    If accurate, this comment seems fairly critical to figuring out what has happened.

    "It was also mentioned that after meeting with various wholesalers around the country, the general consensus is that the employees and managers for The High End were superfluous."

    Basically it sounds to me like the wholesalers (i.e., independently owned AB distributors) were telling the decision makers that the various people who had been hired by the High End senior management under the old plan were not needed. That would suggest the existing Brewery employees have been doing their jobs effectively so there was nothing useful being added by most of those who had been hired by the High End division.
     
    Ranbot, rgordon, evilcatfish and 5 others like this.
  7. MNAle

    MNAle Champion (839) Sep 6, 2011 Minnesota

    I find it odd that I can find this story reported no where else in the business press. Normally, I would expect a layoff announcement by a major corporation to at least get a mention, even if in the bigger picture the numbers are small.
     
    rgordon likes this.
  8. Todd

    Todd Founder (5,534) Aug 23, 1996 California
    Staff Subscriber Beer Trader

    Apparently, the news was embargoed until 5:30pm ET. Our team was in the middle of talking with the communications director for The High End when this broke.
     
    66jzmstr, CMLinder, FonyBones and 6 others like this.
  9. MNAle

    MNAle Champion (839) Sep 6, 2011 Minnesota

    That sounds awkward!
     
    Lone_Freighter likes this.
  10. rgordon

    rgordon Crusader (732) Apr 26, 2012 North Carolina

    There is nothing surprising here at all. This is big business, watching all corners. The word "superfluous" as relates to employees is telling.
     
    ericwo, GrumpyGas and Lone_Freighter like this.
  11. Alexmc2

    Alexmc2 Aspirant (272) Jul 29, 2006 Massachusetts

    As a former AB High End Employee (I left before this round of cuts) it is pretty crushing to those involved. I've got many, many friends who have just lost jobs. I'm pretty saddened at this news.

    Accurate - The wholesalers were never really on board with the program. They couldn't figure out why they needed 4-5 points of contact to call on a single given account (Wholesaler rep, Brewery rep, High End Rep, High End State Manager). High End teams were never given a real strategy other than: Push Shock Top, push Stella, ignore the "easy to sell" craft that we acquired because there were brewery reps for that.
     
  12. drtth

    drtth Poo-Bah (3,219) Nov 25, 2007 Pennsylvania

    Yes, this type of news is always saddening even though I have no friends who are affected.

    It also sounds to me that who ever was responsible for that High End "strategy" and the hiring it involved of a new rep for this and a new manager for that should be among those who are now considered "redundant."
     
  13. EnronCFO

    EnronCFO Devotee (497) Mar 29, 2007 Massachusetts
    Beer Trader

    ABI is ruthless about margins, even when they are growing. Beer sales are slowing, so margins are even more important now. This will eventually be felt at the acquired breweries as well.
     
  14. Alexmc2

    Alexmc2 Aspirant (272) Jul 29, 2006 Massachusetts

    Those guys always survive. I'd love to list their names here to shame them. But that's too low.
     
  15. hopfenunmaltz

    hopfenunmaltz Meyvn (1,305) Jun 8, 2005 Michigan

    This is what the InBev part of ABInBev is known for, buying breweries, eliminating redundancies.

    More in the future would not be a surprise.
     
    Lucular, spoony, Brolo75 and 7 others like this.
  16. Tamarack

    Tamarack Initiate (116) Sep 22, 2016 Massachusetts

    Of course. We really need a sarcasm font :grin:
     
    Gajo74 likes this.
  17. hopfenunmaltz

    hopfenunmaltz Meyvn (1,305) Jun 8, 2005 Michigan

    Dude, it is what the Belgians did, and the Brazilians in charge doubled down on. No sarcasm intended.

    Edit - I realize you were being sarcastic!
     
    #17 hopfenunmaltz, Sep 7, 2017
    Last edited: Sep 7, 2017
  18. nc41

    nc41 Meyvn (1,480) Sep 25, 2008 North Carolina
    Beer Trader

    I lived thru two acquisitions, it takes 6 months or so, but then the reorganization starts. There's always some overlap, particularly at the sales level I'd suppose.
     
    Beer_Economicus likes this.
  19. rgordon

    rgordon Crusader (732) Apr 26, 2012 North Carolina

     
    hopfenunmaltz likes this.
  20. rgordon

    rgordon Crusader (732) Apr 26, 2012 North Carolina

    Oh well. Bear with me!
     
  21. rgordon

    rgordon Crusader (732) Apr 26, 2012 North Carolina

    Sorry for the mishap. Seriously!
     
  22. jageraholic

    jageraholic Disciple (393) Sep 16, 2009 Massachusetts
    Beer Trader

    Breaking News...corporate behemoth known for trimming costs to maximize profits at all costs, trims costs to maximize profits. This is the fear for any brewery it takes over. The rice is coming.
     
    rronin, dgmirelli and chrismattlin like this.
  23. hopfenunmaltz

    hopfenunmaltz Meyvn (1,305) Jun 8, 2005 Michigan

    Hey, I'm an Engineer. Our sarcasm detectors are not so sensitive.
     
    jakecattleco, Leebo and rgordon like this.
  24. rgordon

    rgordon Crusader (732) Apr 26, 2012 North Carolina

    I just suppose I'll have to devise better devices! Words fail me!
     
  25. Oktoberfiesta

    Oktoberfiesta Aspirant (289) Nov 16, 2013 New Mexico
    Beer Trader

    But in the press releases, they say nothing will change

    None of this stuff really sells around here. I don't blame those that got paid. But I feel for the everyday workers who are now screwed.

    No one left go at respective breweries? But what about when Elysian starts brewing at the bud facility in CA? Certainly someone is losing their job when brewing gets more streamlined
     
  26. bbtkd

    bbtkd Poo-Bah (1,520) Sep 20, 2015 South Dakota
    Supporter Subscriber

    Have there been any major upper management changes at AB/InBev recently? Sounds like they shifted their approach drastically, and when that happens you have to wonder if a new manager disagreed with the expansion approach of their predecessor and sought to reverse it.
     
  27. aasher

    aasher Poo-Bah (2,568) Jan 27, 2010 Indiana
    Beer Trader

    No, which is why many believe that these decisions came from Brazil or Belgium.
     
  28. Brolo75

    Brolo75 Poo-Bah (1,721) Aug 10, 2013 California
    Beer Trader

    I work an ABInBev distributor and I was there when InBev bought AB out. There are no major decisions at the local level, it all comes from the upper echelon of management. InBev has tried to make every distributor run on the same standard operation procedures. One program for every operation, it's very frustrating.
    Also, we had three high end reps at our distributor, they just fired two about 4 weeks ago, and have laid the work load of three reps on one. I really feel bad for that one rep
     
    JackHorzempa and bbtkd like this.
  29. mig100

    mig100 Champion (817) Aug 3, 2014 Texas
    Beer Trader

    But the reality is their margins are actually terrible, they always are at that level. The goal is total market domination, the long-term play, then worry about margin.

    The smaller craft guys are having fun experimenting and some are making great (50%+) margin selling the majority of their beer on-site.
     
    chrismattlin and PaulStoneAnchor like this.
  30. Oktoberfiesta

    Oktoberfiesta Aspirant (289) Nov 16, 2013 New Mexico
    Beer Trader

    With less reps, do they think the beer will sell itself?

    That the average consumer is a sucker and wil buy up literally anything?

    I didn't see sales being bad enough for layoffs, which is a scary thought as they penny pinch every facet imaginable.
     
  31. donspublic

    donspublic Meyvn (1,231) Aug 4, 2014 Texas
    Beer Trader

    Man I hate to see that happen and feel bad for everyone affected, but this shit is going on in the world outside of beer also. I work for an IT company who will remain unnamed here, they have split twice and spun off 2 divisions of the company, one in a sale to another company and one in a partnership which formed a new company. I went with the new company as that was my division and the margins are tight and they are reducing redundancies, moving crap overseas and to the north of us as fast as they can. I can't wait to get my remaining 9 years in and go to work for home depot or walmart (as a greeter).
     
    ovaltine, tzieser, jkane101 and 4 others like this.
  32. donspublic

    donspublic Meyvn (1,231) Aug 4, 2014 Texas
    Beer Trader

    *north should have been south
     
  33. Alexmc2

    Alexmc2 Aspirant (272) Jul 29, 2006 Massachusetts

    The top management at High End shifted at least twice while I was there. No clear direction from up top.
     
    drtth likes this.
  34. rgordon

    rgordon Crusader (732) Apr 26, 2012 North Carolina

    I know a few folks affected by this "transition". What really strikes me is corporate talk like redundancy and, worse, superfluous. I really do understand, but I do not like it.
     
  35. MNAle

    MNAle Champion (839) Sep 6, 2011 Minnesota

    "Reduncancy" is the UK-English term for a layoff.

    "Superfluous" is remarkably straight-forward, IMO, rather than being a corporate-speak euphemism.

    Did I miss the phrases "going in a different direction" or "right sizing"? :wink:
     
  36. EnronCFO

    EnronCFO Devotee (497) Mar 29, 2007 Massachusetts
    Beer Trader

    Based on financial filings, BUD's gross margin is well over 50% and operating margins are around 30%.

    Compare this to (5-year averages):
    Heineken: 18.5% gross/14% operating
    MolsonCoors: 38.5%/11% (both are declining)
    Constellation: 44%/26% (both are increasing)
    Craft Brew: 29%/2% (operating margin was 0% in 2016)
    Sam Adams: 52%/16% (just starting to decline on both)

    I'd say BUD is by far the best operator in the space and it's impressive (and scary) how consistent they have been even as they've grown.
     
  37. rgordon

    rgordon Crusader (732) Apr 26, 2012 North Carolina

    I know. I just wonder how all of those layers of responsibility lasted as long as they did. Superfluous doesn't read well in a resume. Man, this beer landscape is evolving!
     
    cavedave likes this.
  38. Oktoberfiesta

    Oktoberfiesta Aspirant (289) Nov 16, 2013 New Mexico
    Beer Trader

    Like I commented on earlier, will the beer sell itself by being priced so low that every bar in town just takes it in Willy nilly? Is that what the high end is banking on. I don't see how losing such highly qualified people is a positive
     
  39. JackHorzempa

    JackHorzempa Poo-Bah (3,057) Dec 15, 2005 Pennsylvania
    Supporter

    Do you work for Anheuser-Busch WOD?

    Cheers!
     
  40. aasher

    aasher Poo-Bah (2,568) Jan 27, 2010 Indiana
    Beer Trader

    It's been about twenty four hours and I've already received a couple offers but I'm taking the weekend off and I'll really consider where I want to go next, next week.
     
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