Molson Coors to restructure Americas business, reduce corporate staff by 9%

[Coors Light Trailer in Laramie, Wyoming.]
RiverNorthPhotography/iStock Unreleased via Getty Images

In an effort to “transform even faster” and move with “urgency” to put the company on a path of sustainable growth, Molson Coors (NYSE:TAP [https://seekingalpha.com/symbol/TAP]) is restructuring its Americas business [https://seekingalpha.com/pr/20271752-molson-coors-beverage-company-announces-corporate-restructuring-of-americas-business-unit] with a focus on its priority brands.

As part of this repositioning, ~400 salaried positions will be eliminated by the end of this year, representing ~9% of the salaried workforce in its Americas business.

The announcement comes less than three weeks after the company’s chief strategy officer Rahul Goyal assumed the role of chief executive [https://seekingalpha.com/news/4497304-molson-coors-beverage-appoints-rahul-goyal-ceo]for retiring Gavin Hattersley. Goyal takes over Molson Coors (NYSE:TAP [https://seekingalpha.com/symbol/TAP]) as the company faces market share losses to Anheuser Busch (BUD [https://seekingalpha.com/symbol/BUD]) and declining beer consumption.

"While we recognize that the beer category has been under pressure recently, which has weighed on the stock, we remain encouraged by TAP's progress on its transformation journey as it advances its strategy to premiumize and diversify its portfolio beyond beer - a key area of focus where we believe Mr Goyal can deliver continued growth," Goldman Sachs’ Bonnie Herzog said at the time of Goyal’s appointment.

By undertaking this restructuring, Molson Coors (NYSE:TAP [https://seekingalpha.com/symbol/TAP]) plans to drive future growth by directing resources closer to its consumers and customers, with an emphasis on strengthening its beer lineup and expanding into premium mixers, non-alcoholic drinks, and energy beverages.

The restructuring is expected to cost the company $35M to $50M, substantially all of which is related to primarily cash severance payments and post-employment benefits. While the payments will be made over the next twelve months, the cost will be incurred in Q4 2025.

Over the past 12 months, shares of Molson Coors (TAP [https://seekingalpha.com/symbol/TAP]) have lost 15.5% in value versus a 14% gain in the benchmark S&P 500. This compares to a 5% loss in shares of Anheuser Busch (BUD [https://seekingalpha.com/symbol/BUD]), -24% in Boston Beer (SAM [https://seekingalpha.com/symbol/SAM]), and -41% in Constellation Brands (STZ [https://seekingalpha.com/symbol/STZ]).

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