Final update: Anheuser-Busch InBev makes biggest cuts yet
Wow, that didn’t take long. Twenty-one days after InBev of Belgium took over Anheuser-Buschof St. Louis, the combined company moved to eliminate overlapping staff. The cuts were not unexpected, but they are dramatic nevertheless, and aimed squarely at Anheuser-Busch’s St. Louis headquarters.
Anheuser-Busch InBev is slashing 1,400 salaried jobs in the U.S., the company said today. A big axe is falling at One Busch Place — about 1,000 of the cuts will be in St. Louis, although others will come at farther-flung breweries. The cuts amount go to about 4.5 percent of Anheuser-Busch’s full-time, global work force before the merger, or 1 percent of the staff of A-B InBev now. Also, more than 250 U.S. positions that are now unfilled will remain that way, and 415 contractor positions will be eliminated, pushing the total jobs lost to about 1,800.
The primary groups affected are engineering, information technology and other corporate positions, A-B InBev said. The cuts will come at the downtown Pestalozzi St. facility and at A-B’s Sunset Hills campus, which houses IT and other functions.
Many things are NOT known right now, including how many of the contractors are in St. Louis, or whether additional cuts are coming. We also don’t know how many folks, if any, were offered transfers or other ways to keep their jobs. Many employees at A-B do not yet know if they will lose their jobs — for many, that news is expected in the next three weeks.
Morningstar analyst Ann Gilpin told Lager Heads she didn’t think these would be the last cuts, although they might represent the largest single round. Gimme Credit bond analyst Craig Hutsonsaid the fast cuts were consistent with what InBev has done in other takeovers, and that folks shouldn’t be surprised.
Anheuser-Busch InBev did not make executives available for comment. An InBev representative declined to say whether original InBev employees in, say, Belgium were also in line for cuts.
One thing Lager Heads DOES know: These cuts did not come because of business struggles at what was previously called Anheuser-Busch. If anything, the company has had solid recent results, and is taking pains to emphasize them. The company said it is ”pleased” with its U.S. beer sales and will “continue to invest in growing our brands.”
The cuts are in addition to the retirement of roughly 1,000 A-B employees this year under a cost-cutting plan called Blue Ocean. Anheuser-Busch Inbev is under serious pressure to pay down $45 billion in debt that it took on to ink the takeover. “Synergies” such as those announced Monday are aimed at helping the company get out from under that load.
Busch Entertainment and the company’s packaging division were left untouched in this round of layoffs. Members of the Teamsters union were protected from the cuts.
From an e-mail sent to employees by A-B president Dave Peacock and Luiz Fernando Edmond, president of A-B InBev’s North American zone:
“These decisions are a result of a careful review of each department. As expected, there are overlapping functions and synergies gained through the merger, which have driven part of these reductions. Others are the result of ongoing efficiency improvements and additional cost-reductions, including lower capital expenditures. These were not easy decisions, but were necessary for the organization. …”
[The e-mail continued] “We know this will be very difficult - many good workers who are trusted and valued in the organization will not remain. We respect and are grateful for their many contributions. They are, and always will be, a part of this company’s legacy of quality - we have long said, once a member of the Anheuser-Busch family, always a member.”
The Missouri Division of Workforce Development told Lager Heads that the state has offered to activate its “Rapid Response” team to meet with company officials and workers to ”help workers train for and transition to new careers.”
“We are making ready all the resources at our disposal to prepare these workers for new careers and support them through this difficult time,” the agency said in a statement.
Depending on their age and years with the company, workers will be eligible for as little as two weeks and as much as one year of severance pay at the rate of their full-time salary.
Sen. Kit Bond (R-Mo.) chimed in with a statement, saying: “While not unexpected, this is more bad news for St. Louis families. I am disappointed that my concerns about job losses from InBev’s acquisition went ignored and that 1,400 workers have now lost their jobs during a very difficult economic time.”
St. Louis Mayor Francis Slay called on President-elect Barack Obama to act. From the Post-Dispatch’s Political Fix blog:
Mayor Francis Slay is pointing to today’s massive job cuts at Anheuser-Busch InBev - 1,400 company wide, about three-fourths of which are in St. Louis - to call on president-elect Barack Obama to jump start the economy soon.
“This is a very painful day for the people at Anheuser-Busch who are losing their jobs, and for the people who depend on them,” Slay said in a statement. “Given the state of the economy, the market for the sorts of white collar professionals who are leaving, and the impending holidays, the timing probably could not be worse.”
Slay urged Congress and Obama - who this weekend promised a major investment in national infrastructure - to pass an economic stimulus package as soon as possible.
“There is no action by government more important to our country’s security,” Slay said, “or more urgent to the hundreds of AB managers and professionals who have learned today that they are losing their jobs and contracts.”
From our story on STLtoday.com:
Three weeks after InBev completed its $52 billion takeover of Anheuser-Busch, the new company said today it would slash 1,400 salaried jobs, or 6 percent of its U.S. workforce in an effort to reduce costs.About three fourths of the job losses will come at the company’s St. Louis headquarters. The rest will occur at other locations and breweries, the Leuven, Belgium-based Anheuser-Busch InBev said in a statement issued around lunchtime on Monday.
The company will also leave 250 open jobs unfilled and eliminate 415 contractor positions. Most of the job cuts will occur by year-end, the company said.
InBev has long promised to keep all of A-B’s U.S. breweries operating. At the same time, analysts predicted that deep cost cuts would be needed to justify the deal. Rumors about job losses grew louder in weeks leading up to and after the Nov. 18 acquisition, especially given Chief Executive Carlos Brito’s reputation for a relentless focus on costs.
“To keep the business strong and competitive, this is a necessary but difficult move for the company,” David A. Peacock, president of Anheuser-Busch, said in a statement. “We will assist in the transition for these employees as much as possible.”
A-B InBev said it will provide severance pay and pension benefits to affected employees based on age and years of service. They will also be offered outplacement services and other benefits during the transition, the company said.
The cuts come on top of more than 1,000 U.S. salaried employees who accepted early retirement. The retirements were part of a $1 billion cost-cutting plan called Blue Ocean that was announced by A-B during the summer.
“Managing our costs is important in building and maintanining a successful business, especially in a challening ecomony,” Peacock said.
Anheuser-Busch InBev will record $197 million in pre-tax expenses related to Monday’s job cuts. About $150 million will come from severance payments and the rest of the amount is related to pension benefits.
Anheuser-Busch employs about 6,000 in St. Louis, and some of the jobs overlap with corporate functions elsewhere in the company.



Jeremiah McWilliams is a native Virginian who came to the Post-Dispatch in early 2007 to cover beer and other consumer products. He previously covered manufacturing for the Virginian-Pilot newspaper in Norfolk, Va. He is a graduate of Washington and Lee University.
How long until the first idiot posts something about the “fatcats” who sold the company?
This shows just how much they care about their employees. They are making the cuts now, since they have a generous leave policy for the holidays.
Any shareholder that agreed to the takeover but yet is shocked by this news is a real… a real… ah… nevermind. What do I care. I don’t drink and I don’t live in the city of St. Louis. I am in St. Charles County.
This company is run by scum bag Euro Trash. Today, terminated all the plant managers at the airport they were “meeting” them at. This isa very sad holiday for many. These cuts would have never been made by the real AB. This is probably just the first set of layoffs aimed at maneuvering around the warn act. I imagine in 60 days we will here of the second round. Auggie cant be blamed because Inbev would have won anyways. It is the third that lost the company in the first place. This first class organization of the past, is now full of classless cowards.
what plant managers are terminated? ours is still here.
Today’s layoffs are simply the first episode in what will no doubt be a series of very sad days. Everyone across the country needs to recognize that a GREAT AMERICAN company has been lost to nothing more than a group of well-dressed money launderers from Europe. In-Bev didn’t have the talent, creativity, nor the initiative to grow their company internally like AB has done throughout the years. They could only achieve greatness by buying a great company! Not by building one!
I wonder if Busch III who gained an extra $90,000,000 in the sale will help employees pay the banker when he comes knocking with a foreclosure notice?
The III is the one to blame he repeatedly refused to put in a “poison pill” to repel any take over attempt. I am sure he saw the $90,000,000 mill and is now in the Bahama’s and couldn’t give a rat’s a@@ who got fired or how they will take care of their families.
Take a stand!!! Brew your own beer!!! It’s so easy and tastes so much better. Unless, of course, you’re a raging alcoholic and can’t wait 2 weeks for batch.
When you buy a top end Cadillac, then you take off all the chrome and bumpers to sell, then you take out the leather seats to also sell, then you take out/off the motor and wheels and replace them with something from Yugo because they cost too much to maintain and replace, do you still have a Cadillac?
The Busches sold the company a long time ago. There wasn’t much they could do once InBev offered $70/share to those that really controlled the company’s fate. It’s easy to say Busch III could have put in a poison pill, but those are hated by major money funds and don’t usually exist outside of companies where one shareholder has a decent-sized stake that they want to defend. No such group existed at AB anymore; 4% is not a huge stake.