Coca-Cola Co. (NYSE:KO) has announced that it will cut around 2,200 jobs or 17% of its global workforce including around 10% of its US workforces as sales continue to decline amid the COVID-19 pandemic.
Coca-Cola cutting 10% of its US workforce
In the US the company will lay off around 1,200 staff which includes 500 in Atlanta alone where the company’s headquarters are based. At the end of last year, the company had 86,200 employees globally and around 10,400 employees in the US. These job cuts include involuntary and voluntary separations with severance packages expected to cost around $350 million to $550 million. However, the layoffs will not affect Coke’s bottlers.
The pandemic affected the company’s business with sales at movie theatres and stadiums drying up due to the coronavirus lockdowns.Revenue dropped 9% YoY to $8.7 billion in the quarter ended September 30, 2020. The down has pushed the company to accelerate the restructuring of its operations that were already underway. Coca-Cola had announced plans to cut its workforce over the summer when it offered buyouts to around 4,000 employees in the US, Puerto Rico, and Canada.
Coke reducing brands by 50%
James Quincey the company’s CEO indicated during an earnings call recently that they have been challenging how they do business. He said that the pandemic only helped them realize that they can be bolder in their efforts. The beverage company plans to reduce its operating units to nine from 17 units in four regions. However, the company has not indicated the specific units that it will do away with.
Coke is also reducing its brands by almost 50% to 200 as it seeks to focus on popular segments including beverages such as Coke Zero and Coke. Early this year the company shed several slow-selling brands including Zico, Tab, Fiestry cherry, Odwalla, and Diet Coke. The company plans to use savings from the brands it shed to grow brands such as Simply Juices Minute Maid and fund the introduction of new products such as Coca-Cola Energy, Aha Sparkling water, and Topo Chico Hard Seltzer.