Anheuser-Busch (NYSE:BUD) isn’t having a good year and it doesn’t seem to be getting any better. Today, the beer brewing giant announced a new round of layoffs. Specifically, the company will be cutting 350 jobs.
While this figure technically amounts to less than 2% of its corporate workforce, the news is still negatively impacting BUD stock, which has spent the day trending downward. Investors may be more concerned with the broader implications of the Anheuser-Busch layoffs, as they may signal further problems for both the company and the sector.
Of course, Wall Street analysts still seem to regard BUD stock favorably. However, these job cuts aren’t likely to inspire much confidence from new investors.
What the Anheuser-Busch Layoffs Mean for BUD Stock
While BUD stock hasn’t actually fallen too far today, it has been gradually declining since markets opened. As of this writing, shares are down about 1% for the day. While the stock has risen slightly over the past month, trading has been highly volatile and doesn’t appear to be stabilizing as the market adjusts to the recent layoff news.
This company has been struggling to retain its place at the top of its sector ever since a controversial partnership caused an uproar among some of its consumers. BUD stock has regained some ground since, although it remains in the red for the past six months. So, it makes sense that the company would be resorting to layoffs in an attempt to trim expenses and show investors that it’s making changes.
CEO Brendan Whitworth stated the following about the news:
“While we never take these decisions lightly, we want to ensure that our organization continues to be set for future long-term success […] These corporate structure changes will enable our teams to focus on what we do best — brewing great beer for everyone and earning our place in the moments that matter.”
Layoffs can sometimes help shares rise if a company can prove that it’s making changes for the right reasons. However, with the problems that Anheuser-Busch has encountered lately, it may have a difficult path forward — even if it can streamline operations through job cuts. As the dust settles, BUD stock is likely to struggle.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
