Anheuser-Busch InBev, the manufacturer of Bud Light, is facing significant challenges as it announces plans to lay off hundreds of corporate employees in response to months of declining sales. The decision comes after the company faced backlash from conservative consumers following a product endorsement by Dylan Mulvaney, a transgender influencer, in April. The endorsement caused widespread controversy among conservatives, leading to a boycott that severely impacted sales.
The layoffs will impact "less than 2%" of the company's U.S. employees, amounting to approximately 380 workers out of their total 19,000 U.S.-based workforce. The company clarified that frontline workers, including warehouse staff, drivers, and salespeople, will not be affected by the layoffs. Anheuser-Busch CEO Brendan Whitworth stated that the difficult decision was necessary to ensure the long-term success of the organization.
The decline in sales was evident in the data provided by Bump Williams Consulting and Nielsen NIQ, which showed a decrease in Bud Light sales across the U.S. for at least six weeks following the start of the boycott. Sales dropped by nearly 26% in the week ending on May 20. As a result, Modelo Especial surpassed Bud Light as the top-selling beer in the U.S. The stock price of Anheuser-Busch InBev has also taken a hit since the start of the controversy, falling nearly 12%.
In response to the declining sales, Anheuser-Busch InBev provided financial support to tens of thousands of frontline workers at independent distributors. CEO Michel Doukeris emphasized the company's commitment to its employees during an earnings call in May.
Anheuser-Busch faced criticism from LGBTQ advocates after the company placed two executives involved in the endorsement of Mulvaney's Instagram post on leave. Some LGBTQ advocates saw this move as a capitulation to the backlash. The Human Rights Campaign, the largest LGBTQ advocacy organization in the U.S., suspended the company's Corporate Equality Index score. Previously, Anheuser-Busch had received a perfect score of 100.
In April, Anheuser-Busch InBev released a statement from CEO Brendan Whitworth on its website, expressing their intention to bring people together rather than contribute to division. However, the controversy surrounding the endorsement continued to impact the brand's reputation.
Despite the setback, Bud Light remains the best-selling beer in the U.S. so far this year, according to industry experts. Anheuser-Busch will now focus on restructuring its corporate organization to ensure future success in a highly competitive market.
