Anheuser-Busch Inbev

TOPIC: Workforce reductions and compensation and benefits within external studies

TITLE: Anheuser-Busch InBev

THESIS STATEMENT: Anheuser-Busch Inbev has characterized their management style and success through factors of workforce reductions and compensation and benefits in recent years.

I. Introduction

A. Definition of workforce reductions and compensation and benefits

B. Discuss importance of workforce reductions and compensation and benefits within a company

C. Anheuser-Busch InBev

II. Company History

D. History of Anheuser-Busch

E. History of Inbev

F. Anheuser-Busch Inbev merge

G. Current management practices

III. Workforce Reductions

A. Layoffs

B. Blue Ocean

IV. Compensation and Benefits

A. CEO Carlos Brito

B. Corporate culture

C. Definition of meritocracy

D. Retiree health care and pensions

V. Counter Arguments

VI. Conclusion

A. Summarize importance of workforce reductions and compensation and benefits

B. Future of Anhesuer-Busch InBev

1. Larger profits and growth

2. Higher performance

Workforce reductions and compensation and benefits are two Human Resource factors that if managed properly, can create a successful business. Workforce reductions relate to the act of suspending or dismissing an employee due to lack of work or because of corporate reorganization. Compensation and benefits relate to direct and indirect benefits including salary, allowances, bonuses, commission, insurance, pension plans, and vacations that employees receive from their employer. (BusinessDictionary.com) Workforce reductions have become a necessary practice for many businesses as the economy and markets have changed. Many businesses have found that there is less of a necessity for particular jobs, and the demand for work in some departments has become limited. Additionally, compensation and benefits are necessary business factors that are used to attract, motivate, and retain employees. This affects the company's recruitment rate, retention rate, and employee satisfaction. While the economy has gone through many changes in recent years, it is important for businesses to design compensation and benefit packages that are attractive and effective for employees. Anheuser-Busch Inbev has characterized their human resource management style and success through factors of workforce reductions and compensation and benefits in recent years.

Anheuser-Busch was established in St. Louis, Missouri in 1860. Many German immigrants came to St. Louis during this time creating a large focus on brewing beer. The company quickly expanded to more than 50 breweries, and continued to grow further during the years to come. Anheuser-Busch remained successful when national Prohibition became a law by keeping their doors open and diversifying to remain in business. The company marketed more than 25 different non-alcohol products which included soft drinks, truck bodies, and ice cream. On April 7, 1933, beer was re-legalized, and production and growth continued. By 1957, Anheuser-Busch was declared the leading U.S. brewer. (Anheuser-Busch) In 1987, the two largest Belgium breweries merged: Artois and Piedboeuf, forming Interbrew. In 1999, the two largest Brazilian brewers merged: Antarctica and Brahma, forming AmBev. In 2004, both Interbrew and AmBev merged to form the world's largest brewer, InBev. Finally, in November of 2008, the merger between Anheuser-Busch and Inbev was completed, resulting in the leading global brewer in the world. Their dedication to heritage and quality is rooted from prior mergers of strong brewers. Anheuser-Busch Inbev (AB Inbev) is now a multinational beverage and brewing company and is one of the top five consumer product companies. The company has 14 brands that individually generate over 1 billion dollars per year in revenue. This is out of a portfolio that includes more than 200 brands. The most familiar global and regional brands include Budweiser, Corona, Stella Artois, Beck's, and Bud Light. All AB Inbev portfolio brands revenue over 36 billion dollars a year. (AbInbev) AB Inbev has been directly affected by changes in the economy within the past few years. They have been forced to make drastic changes within their business practices including reductions in their workforce and changes in compensation and benefits. Fortunately, these changes within the company have proven to be successful and effective.

The merger between Anheuser-Busch and Inbev resulted in downsizing through workforce reductions in recent years. In order to maintain a strong and competitive business while the economy fell into a deep recession, the company required this change. Mergers occur for improved finances, less duplication of services and staff, the ability to grow a company faster, and the anticipation of higher returns for shareholders. (Knowledge@Wharton) AB Inbev cut 1,400 salaried positions that affected 6 percent of the company's total U.S. workforce. Of those positions, 75 percent were based out of the company headquarters in St. Louis, Missouri. Additionally, more than 250 positions that were open would no longer be filled and 415 contactor positions were abolished. (Brussels)

As with most mergers, layoffs occur even when the economy is not to blame. Prior to the layoffs, AB Inbev provided an opportunity for salaried employees to accept a voluntary retirement offer. This planned cost reduction of 1 billion dollars was called project Blue Ocean. This helped to eliminate more than 1,000 jobs through an agreement to reduce the full-time salaried workforce of 8,600 by 10 to 15 percent. Employees were provided severance pay and pension benefits, among other services during this transition. (Brussels) The purpose of Blue Ocean was to help raise the combined stock value more than 2 billion dollars, eliminate costs, and grow beer sales. Of the 1,000 planned jobs to be eliminated, there were 360 key employees that were well compensated just for being selected and for making Blue Ocean