(Reuters) - Molson Coors Brewing Co (TAP.N) said on Wednesday it would cut jobs, simplify business segments and add more products beyond beers as the new Chief Executive Officer Gavin Hattersley looks to boost revenue.
The company, which had about 17,750 employees at the end of 2018, plans to save about $150 million in cost and expects to cut 400-500 jobs in its U.S., Canada and international segments.
This is part of its plan to bring down its business units to one each in North America and Europe from four globally. It will also shut its Denver office and make Chicago its North American operational base.
The brewer said it would incur charges between $120 million and $180 million, which will be spread out through the rest of the financial year and until fiscal 2021.
“Organizational changes, further cost-cutting are appropriate, though the magnitude of cost saves is likely to underwhelm,” Jefferies analyst Kevin Grundy said.
Shares of the company, which missed Wall Street estimates for quarterly revenue and profit, fell as much as 5%. Molson Coors has posted sales decline in six of the last seven quarters.
The shift to other products comes at a time when demand for traditional beer has been slowing globally.
Last week, the world’s largest brewer Anheuser-Busch InBev (ABI.BR) lowered its annual profit growth forecast as drinkers in Brazil and South Korea turned away from its beers.
Earlier this year, Molson launched a canned wine and a hard coffee line and said on Wednesday that it aims to ramp up investment in “above-premium” beers, a fast-growing category, that includes craft beers.
As it broadens product line, the maker of Coors Light and Miller Lite said starting 2020 it would be known as Molson Coors Beverage Co.
“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 the significant and difficult changes necessary to get back on the right track,” Hattersley, who was U.S. unit head till September, said.
Reporting by Praveen Paramasivam in Bengaluru; Editing by Shinjini Ganguli and Arun Koyyur