Budweiser's parent company, AB InBev (BUD.US), is facing tough times and will be cutting thousands of jobs in Asia Pacific to reduce costs.

According to sources, the world's largest beer maker AB InBev (BUD.US) is planning to cut thousands of jobs this year at its Asia-Pacific unit BUD APAC (01876) to cut costs amid weak consumer demand.

One of the sources said the layoffs are part of the company's plan to cut its operating costs by about 15% this year. The layoffs this year, which will mean the departure of thousands of employees, will follow the 4,000 layoffs (about 16% of its workforce) last year.

BUD APAC has been steadily cutting its workforce in recent years, and by the end of 2023, its employee count had dropped by about 20% from over 30,000 in late 2017. BUD APAC's China region is expected to bear the brunt of the layoffs, as it accounts for over 80% of the company's total workforce.

A spokesperson for BUD APAC said: "As we optimize our operating structure, we are committed to promoting innovation and nurturing our workforce to drive our success. For over four decades, we have invested in China, and we are confident in its growth potential and will continue to focus on our strategic priorities."

BUD APAC is facing difficulties due to weak consumer demand. The company reported a 9% year-on-year decline in revenue to US$6.25 billion and a 15% year-on-year decline in net profit to US$730 million in 2024.

To turn around its business, BUD APAC has appointed veteran Yanjun Cheng, who has worked for the company for 29 years, to replace Jan Craps as CEO, who will step down in April. Yanjun Cheng needs to lead BUD APAC through multiple hurdles, including its declining image in the Chinese market. A report by the Hong Kong Consumer Council last year found that Harbin Master Brew, a beer under BUD APAC, was found to contain vomitoxin, which causes short-term nausea, diarrhea, and headaches. In addition, BUD APAC has reportedly violated China's advertising law multiple times and has been fined RMB1.4 million (US$194,000) since May 2021 for its violations.