Coca Cola Co.
KO 0.34%
said it will cut 2,200 jobs worldwide, including 1,200 in the US, as the coronavirus pandemic accelerates the soft drink giant’s restructuring efforts.
The Atlanta company, which employed about 86,000 employees at the start of the year, is cutting spending and products amid the closure of restaurants, bars, movie theaters and sports stadiums that sell its drinks around the world.
The reductions amount to approximately 12% of the company’s US workforce. Coke will cause the job to be scrapped through a combination of buyouts and layoffs, a spokesman said. In August, it offered voluntary divorce packages to approximately 4,000 employees in the US and Canada. The company did not say how many people took part.
Coke’s North American business unit will be reorganized to be more like other units around the world. Until now, the company’s operations of fountain machines, bottles and cans and Minute Maid in North America each had their own teams for marketing, communication with retailers, and coordination with bottlers. Those teams will be consolidated, the company said.
Coke expects the job cuts will result in annual savings of between $ 350 million and $ 550 million, the spokesman said. The latest cuts include about 500 jobs in the Atlanta metro area, where the company is based.
Coke also said this year that it would cut its 430 core brands by about half, to 200, and shrink its beverage portfolio to products that grow and reach large scale. It is shutting down its Tab soda and Zico coconut water brands and closing its Odwalla juice and smoothie business earlier this year.
The restructuring will allow the company to function more like a network that requires “less decision-making, less bureaucracy, and ultimately fewer people,” said John Murphy, Coke’s chief financial officer, in an interview in November.
When a company faces such an immediate sales interruption, “it really forces you to re-evaluate through a stricter lens,” he said, referring to the blow the pandemic had taken on Coke.
Coke reported sales of $ 8.65 billion in the quarter ended September 25, down 9% from a year earlier, but an improvement from the second quarter, when sales declined 28%. Last quarter earnings fell about a third from a year ago to $ 1.74 billion.
Beverage competes with PepsiCo Inc.
and Keurig Dr Pepper Inc.
have not announced mass layoffs this year.
The restructuring will not affect Coke’s bottling operations, which are largely independent. Those bottlers employ hundreds of thousands of people around the world.
Will the coronavirus pandemic lead to long-term changes in the way we buy food? To better understand the challenges facing supermarkets, WSJ’s Alexander Hotz spoke with an industry insider, a store owner and a Walmart executive.
Write to Jennifer Maloney at [email protected]
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