The Associated Press and other media outlets today reported that AB InBev expects to cut approximately 3 percent of its total global workforce, the equivalent of thousands of jobs, once the giant consumer goods conglomerate complete it latest $110 billion mega acquisition, that being rival beer brewer SABMiller.

The AP report notes that with a combined global workforce of roughly 230,000 employees, the 3 percent cutback could amount to around 6600 employees over a three-year period.

Such news should not at all be surprising, given the track record of performance from InBev’s controlling investor 3G Capital. The Brazil based private equity firm is noted for its zeal for zero-based budgeting techniques, along with a formula for the shedding of thousands of employees and across the board cuts in all forms of “unnecessary” expenses. Such zeal includes the extension of payment intervals involving suppliers which have been reported to average in the hundreds of days.

In our October 2015 Supply Chain Matters commentary, Are Mega Acquisitions Toxic for Product Process and Supply Chain Innovation, we observed that the sheer size and scope of bringing together two global beer giants is sure to provide added challenges in rationalizing product innovation, consolidation of business systems, supply and demand fulfillment capabilities on a global scale. Thus, today’s report is not at all surprising.

This week’s report additionally notes that InBev is yet to evaluate “front-office supply departments, for which integration plans are not completed.” By our lens, that is the indication of even more cuts to come along with other potential consolidations in the above noted areas.

In October, we observed that acquisitions of the dizzying scope and magnitude of-late have led to months of organizational disruption and changing management focus. That is especially pertinent in industries such as food and beverage and consumer goods, where consumer preferences and buying trends have caused upheavals among existing players and have led to current consolidation or growth via acquisition. Many of such past mega acquisitions have admittedly mixed results as to overall long-term success.

The open question is whether such acquisitions are likely toxic for required needs for product, process and supply chain focused innovation, agility and capability efforts, not to mention enhanced collaborative relationships with value-chain partners.

We have our views, but the ongoing new AB InBev consolidation efforts may provide different evidence.

Stay tuned.

Bob Ferrari