- Coca-Cola said it is cutting 2,200 jobs globally through buyouts and layoffs as part of a restructuring plan accelerated by the ongoing pandemic, according to a statement emailed to Food Dive. In the U.S., the beverage giant is reducing its workforce by 1,200, or 12% of its staff. Coca-Cola had 86,200 employees worldwide at the end of 2019.
- Coca-Cola did not disclose how many of the job cuts were tied to layoffs and the acceptance of a voluntary buyout. The Atlanta-based company expects severance costs to be between $350 million and $550 million."Our transformational work was well underway prior to the pandemic," the company said. "The pandemic was not a cause for these changes, but it has been a catalyst for the company to move faster."
- In August, Coca-Cola said it would offer buyouts to about 4,000 employees in the United States, Canada and Puerto Rico as part of a broader restructuring to help streamline its business. It's also been actively scaling back its beverage portfolio to focus on brands that are growing and have the potential to achieve a large scale.
Since James Quincey took the helm of Coca-Cola in 2017, he has moved aggressively to make the beverage giant more relevant with changing consumer tastes while positioning the 128-year-old company for the future. The latest restructuring further accelerates that push.
In recent years, Coca-Cola has moved into faster-growing areas by acquiring Topo Chico premium sparkling mineral water, launching the first Coke-branded energy drink, spending $5.1 billion to purchase Costa Coffee and acquiring the remaining stake in Fairlife milk.
But beyond the acquisitions and new product launches, Coca-Cola has been transforming its operations to make itself more nimble and responsive to the market. As part of its restructuring, the company has said it would reduce its 17 business units to nine to eliminate duplication and get products to market more quickly.
The Wall Street Journal also noted Coca-Cola's North America operation will be consolidated to look like other divisions globally. Until now, Coca-Cola's North American fountain machine business, bottle and can business and Minute Maid operations each had their own teams for marketing, communicating with retailers and coordinating with bottlers, the newspaper said.
In its statement, Coca-Cola said it is "in the process of building an organizational structure that will address [the consumer's] evolving needs and behaviors." The maker of Diet Coke, Sprite, Honest Tea and Powerade said the reorganization announced in August would continue into 2021.
Coca-Cola has been one of hardest-hit CPG companies during the pandemic, with about half of its sales coming from outside the home. Volumes have plummeted as stadiums, movie theaters, parks and restaurants have closed or seen their operations sharply curtailed as a result of the coronavirus.
Along with changes to its operations, Coca-Cola has been cutting brands that have low market share, declining sales or no longer fit into its operations. The company was already paring down its portfolio but the coronavirus pandemic sped that up. In recent months, the company has announced plans to discontinue Tab soda, Odwalla juice and Zico coconut water. Ultimately, Coca-Cola plans to eliminate an estimated 200 brands globally.
These job losses are the latest round of cuts from Coca-Cola. In 2017, the company announced it would cut 1,200 jobs. Two years earlier, the company said it would reduce its headcount by at least 1,600 white-collar jobs globally, according to The Wall Street Journal.
This latest restructuring is much deeper than prior efforts, but should put Coca-Cola's operations on firmer ground as consumer tastes evolve and businesses it serves rebound from the coronavirus.