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Coke Co.
KO 0.38%
said it was cutting 2,200 jobs globally, including 1,200 in the United States, as the coronavirus pandemic accelerated the soda giant’s restructuring efforts.
The Atlanta-based company, which had about 86,000 employees at the start of the year, has cut spending and revenue due to closures of restaurants, bars, movie theaters and sports arenas that sell its drinks in the whole world.
The cuts represent about 12% of the company’s US workforce. Coke will cut jobs through a combination of buyouts and layoffs, a spokesperson said. In August, it offered voluntary severance packages to approximately 4,000 employees in the United States and Canada. The company did not say how many people attended.
Coke’s North America business unit will be reorganized to be more like other units around the world. Until now, the company’s fountain machine, bottle and can machine and Minute Maid operations in North America have each had their own marketing, retailer and bottler coordination teams. These teams will be consolidated, the company said.
Coke expects the job cuts to result in annual savings of between $ 350 million and $ 550 million, the spokesperson said. The latest cuts include about 500 jobs in the Atlanta metro area, where the company is based.
Coke also announced this year that it will cut its 430 main brands by about half, to 200, narrowing its beverage portfolio to growing products and capable of reaching large scale. It is abandoning its brands of Tab soda and Zico coconut water, and earlier this year closed its Odwalla juice and smoothie business.
The restructuring will allow the company to operate more as a network requiring “less decision making, less bureaucracy and ultimately less staff,” Coke chief financial officer John Murphy said in an interview in November.
When a business faces such an immediate disruption in sales, “it really forces you to re-evaluate through a tighter lens,” he said, referring to the blow to Coke’s business from the pandemic. .
Coke reported revenue of $ 8.65 billion in the quarter ended September 25, down 9% from a year earlier, but an improvement from the second quarter, when revenue fell 28% %. Profit for the last quarter fell about a third from a year ago to $ 1.74 billion.
Rival drinks PepsiCo Inc.
and Keurig Dr Pepper Inc.
have not announced any massive layoffs this year.
The restructuring does not affect Coke’s bottling operations, which are mostly independent. These bottlers employ hundreds of thousands of people around the world.
Will the coronavirus pandemic cause long-term changes in the way we buy food? To better understand the challenges facing grocery stores, WSJ’s Alexander Hotz spoke with an industry insider, store owner and Walmart executive.
Write to Jennifer Maloney at [email protected]
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