- 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, the company said in a statement. The voluntary package, which will first be offered to individuals hired on or before Sept. 1, 2017, will help limit the number of employees the company will lay off. Coca-Cola's global severance programs are expected to cost it between $350 million to $550 million.
- As part of its restructuring, the company said it would reduce its 17 business units to nine to eliminate duplication and get products to market more quickly. "As we implement these changes, we’re continuing to evolve our organization, which will include significant changes in the structure of our workforce," James Quincey, Coca-Cola's CEO, said in a press release.
- Coca-Cola's new units will focus on regional and local operations, working closely with five marketing category leadership teams around the world. The five categories are: soda; sparkling flavors; hydration, sports, coffee and tea; nutrition, juice, milk and plant; and emerging categories.
Since Quincey took over the 128-year-old beverage giant in 2017, he has moved aggressively on his commitment to turn Coca-Cola into a “total beverage company” and move it beyond its namesake brands.
In his time at the helm, he has acquired Topo Chico premium sparkling mineral water, launched the first Coke-branded energy drink and spent $5.1 billion to purchase Costa Coffee. It's going to start selling a Coke and coffee blend in the United States in January. Its bevy of moves also include acquiring the remaining stake in Fairlife milk from its joint venture partner, releasing a new sparkling water brand called Aha, overhauling its Diet Coke empire with a taller, slimmer can and new varieties and replacing Coke Zero with Coca-Cola Zero Sugar by adjusting the blend of flavors to make it taste more like original Coke. The company also announced it will break into the U.S. alcoholic beverage category next year with Topo Chico Hard Seltzer.
While the changes to Coca-Cola's beverage operations established a portfolio that was better positioned to address more consumer needs throughout the day, it also created a more complex organization for Coca-Cola, which has more than 10,000 employees in the United States. Coca-Cola did not say how many workers would ultimately be let go as part of the current restructuring.
These jobs cuts are latest round from Coca-Cola. In 2017, the company announced it would cut 1,200 jobs, and two years earlier said it would reduce its headcount by at least 1,600 white-collar jobs globally, according to The Wall Street Journal.
The changes announced by the Atlanta-based company on Friday are designed to make it more nimble, able to innovate faster and keep it more closely connected with the shopper. As consumption habits change both in terms of which beverages people consume and where they drink them, it is imperative that the global giant is able to respond quickly. This sweeping restructuring should better position Coca-Cola to do just that.
“The changes in our operating model will shift our marketing to drive more growth and put execution closer to customers and consumers while prioritizing a portfolio of strong brands and a disciplined innovation framework," Quincey said.
The overhaul comes as Coca-Cola has seen its sales take a hit because stadiums, movie theaters, parks and restaurants have been closed or seen their operations sharply curtailed as a result of the coronavirus. In July, Coca-Cola reported a 28% drop in quarterly sales, though executives said they believed the worst of the pandemic's impact on its business was behind it. To better position the company, Coca-Cola announced recently it would pare down its portfolio to focus on its largest and most popular brands.
Quincey told analysts during its recent earnings call that his goal is to position Coca-Cola to emerge from the pandemic stronger than before it began. With the culling of its portfolio and the restructuring announced Friday, it is apparent Quincey is not content to wait things out, a message he has echoed in previous comments.
"What it means to be a total beverage company is always going to evolve because people's tastes and needs will continue to evolve," Quincey wrote in response to questions submitted by Food Dive in 2019. "We're changing in the ways we need to change."