Anheuser-Busch InBev to cut 1,400 American jobs

BRUSSELS, Belgium -- Anheuser-Busch InBev announced Monday it would cut some 1,400 U.S. jobs -- or another 6 percent of its U.S. work force -- to help save the world's largest brewer at least $1.5 billion a year.

It said three-quarters of the jobs will disappear from Anheuser's North American headquarters in St. Louis, both at downtown offices and a campus in suburban Sunset Hills, Mo.

A letter employees received Monday said affected workers had not yet been notified and they will likely be people who hold engineering, information technology and other corporate positions. Unionized workers at the company's 12 North American breweries will not be affected.

The latest job cuts go beyond plans Anheuser-Busch announced this summer to reduce costs, before it agreed to be taken over by Belgium-based InBev.

The company said in a news release the job losses will help it save at least $1.5 billion a year by 2011 and cope with a "challenging economy." Most of the cuts will be made by the end of the year.

Anheuser-Busch president David A. Peacock said in the letter that there are overlapping job functions related to the buyout by InBev, along with a need for cost-cutting and lowering capital expenditures.

"To keep the business strong and competitive, this is a necessary but difficult move for the company," he said in the news release.

The company has strong ties to the St. Louis area, where its namesake beers have been brewed for more than 150 years.

St. Louis Mayor Francis Slay called Monday a "very painful day" for the people who are losing their jobs. He promised the city would help the affected employees find new jobs and get training and education.

"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," the mayor said in a statement.

He said the news was not surprising, though, considering the redundancies in jobs resulting from the company's sale last month to InBev.

Anheuser-Busch, maker of top-selling Bud Light and Budweiser, is the top-selling beer company in the U.S. with about half the market. But it has not managed to expand around the world as fast as InBev -- a Belgian-Brazilian hybrid that owns hundreds of local brands but few real stars.

InBev SA wrapped up its takeover of Anheuser-Busch Cos. Inc. after a bitter takeover battle turned sweet with a higher $52 billion takeover bid that Anheuser-Busch's shareholders approved last month.

Anheuser-Busch had 8,600 salaried workers this summer and had planned to reduce that by 10 to 15 percent, mostly by offering some 1,000 employees a voluntary early retirement package. That aimed to save the brewer some $1 billion a year.

The new job losses mean the brewer will lose around a quarter of the salaried workers it had at the start of 2008.

More than 250 unfilled jobs will be slashed and an extra 415 contractor positions will be eliminated. About a quarter of the jobs to go will be in field and brewery locations, it said.

InBev had pledged not to close any of the breweries as long as it was not forced to pay any extra taxes.

The redundancies will cost the company $197 million before taxes, mostly in severance payments and pension benefits.

The takeover deal gave InBev control over America's iconic Budweiser beer -- and gave Bud the chance to sell more widely into rapidly growing markets in Latin America, eastern Europe and Asia where InBev draws most of its profit.

Beer sales in Europe are slowly declining as the economy weakens there.

In North America Anheuser-Busch reports sales are still growing, even as the company passes along price increases to consumers to recoup higher input costs.

InBev is renowned for its tight control of costs since the company was formed in a 2004 merger between Brazil's AmBev and Belgium's Interbrew. The Brazilian management team who headed the company had a sharp focus on costs that came as a shock to the European business.