MillerCoors will eliminate 350 salaried positions across the organization by the end of October, the company announced today in a memo.
In the letter, CEO Gavin Hattersley characterized the job cuts as MillerCoors “moving quickly and decisively to get our business back on track.”
“To accomplish this, we know we need the financial flexibility to invest in our brands and solutions at the right level, quickly capitalize on new opportunities, and maintain a robust marketplace presence,” he wrote. “Our current fixed cost base limits our ability to do all this.”
As such, Molson Coors’ U.S. business is offering a voluntary severance program to existing employees as well as eliminating 150 unfilled positions. A MillerCoors spokesperson told Brewbound that the voluntary severance program “allows people who may be ready to move on, the opportunity to do so with a generous package.”
“So it’s too soon to say at this point what the exact impact will be to each function,” the spokesperson added. “Once we know who has elected to volunteer, leaders will review requests against the organizational design and determine how roles will be impacted.”
However, the company still plans to hire a new chief marketing officer to replace David Kroll, who left his post on July 27. The new CMO’s top priority will be turning around Coors Light.
Hattersley’s letter added that the company is “committed to handling this restructuring with speed, dignity and respect for all involved and without marketplace disruption.”
“While we know we still have some challenges ahead, we’re establishing a realistic, achievable plan for 2019 to put us on the path to long-term sustainable growth,” he wrote.
According to the MillerCoors blog, the last time the company restructured was in 2013.
During August’s second-quarter earnings call, Molson Coors leaders conceded that the company would not meet a stated objective of right-sizing production volumes to “return to flat” in 2018. For the first six months of the year, the company reported a 2.2 percent decline in net sales, to more than $5.4 billion.
In the U.S., the company reported second-quarter U.S. revenue and depletions declines of 3.1 percent and 4.8 percent, respectively.
At the time, Molson Coors CEO Mark Hunter said reversing Coors Light’s negative trends was “urgent.”
On the same day that it reported those declines, Molson Coors announced the formation of a joint venture with a Quebec cannabis company HEXO, a recreational cannabis “sister brand” to The Hydropothecary, a licensed producer and distributor of medical cannabis.
A week after reporting its second-quarter earnings, MillerCoors also announced the decision to cease production of Two Hats, a light beer brand targeted at 21- to 24-year-old consumers. However, the company last week said it plans to launch Cape Line, a new line of low-calorie flavored alcoholic beverages, next spring.
MillerCoors is the latest beer company to restructure in 2018. In August, Constellation Brands terminated about 60 of its 100 or so craft and specialty reps throughout the U.S. Earlier this year, Ninkasi, Avery Brewing, Green Flash, New Belgium, and Pabst Brewing Company, among others, cut staff.
In 2017, Anheuser-Busch InBev, the world’s largest beer manufacturer, eliminated as many as 350 sales positions, many within its High End craft division.
At the close of trading on Tuesday, Molson Coors stock (TAP), was down 2.77 percent ($64.89). The stock is down from its 52-week high of $90.62.