Molson Coors Goes Flat, Even Beermakers Are Laying Off People
The downward trajectory in the employment cycle has now affected one of America’s largest beermakers, that is, Molson Coors Brewing Co., the producer of Coors Light and Miller Lite, who is expected to lay off 500 employees across its international offices.
The bulk of the job cuts will be concentrated in the company’s international offices in North America.
As of 2018, the company had 17,500 employees, which means about 3% of its entire workforce will be laid off in the near term.
The restructuring plan will cost Molson Coors about $180 million through 2021. During the process, hundreds of employees will be laid off, and that number could increase during a recession.
Molson Coors, also announced it had begun a transitional phase of relocating its Denver headquarters to Chicago, but will keep its brewery open in Golden, Colorado.
“Our business is at an inflection point. We can continue down the path we’ve been on for several years now, or we can make significant and difficult changes necessary to get back on the right track,” CEO and president Gavin Hattersley said in a press release.
Beermakers, as a whole, are suffering from declining demand in North America in the last several years. Industry tracker IWSR said alcohol sales volumes have dropped since 2017.
Shares of Molson Coors dropped 2% by 1:00 pm est., but have fallen nearly 13% in the last four trading sessions. Wall Street’s earnings expectations for 3Q missed on Wednesday morning as revenue and profits dropped.
Anheuser-Busch InBev has also lowered its guidance for the next several quarters as sales volumes slump across the world.
Molson Coors, attempting to stop further hemorrhaging of sales, recently acquired a portfolio of “brewed beverages,” including tea, coffee, and beer.
In 1Q19, the brewer also started selling alcoholic coffee and canned wine.
With marijuana sales up across the US and alcohol sales moving lower, the consumer, with insurmountable debts, in the next recession, will be smoking their financial woes away, opposed to drinking themselves to sleep seen in prior economic downturns. Every bear market is different.