Coca-Cola plans to offer voluntary separation to at least 4,000 employees, a move that comes amid continuing challenges in the soft-drink industry https://t.co/eZgSzqUtj1
— Bloomberg (@business) August 28, 2020
Coca-Cola on Friday announced a workforce restructuring plan, which will include voluntary job cuts.
Shares of the beverage giant, which has a market value of $210 billion, rose 1% in premarket trading. The stock has fallen 12% so far this year.
Coke said it will offer voluntary layoff packages to employees who qualify, starting with about 4,000 workers in the U.S., Canada, and Puerto Rico who were hired on or before Sept. 1, 2017. The voluntary buyouts are expected to stem the number of involuntary job cuts that will follow.
The company is forecasting that its overall global severance program will cost the company between $350 million and $550 million. Coke had roughly 86,200 employees worldwide as of Dec. 31, of which more than 10,000 were located in the U.S.
On the operations side, nine new divisions will replace 17 business units and will focus on scaling new products faster and eliminating the duplication of resources. Coke’s global ventures and bottling investment divisions will be unchanged.
Coke’s restructuring plan comes as the company streamlines its drink portfolio to focus on larger and more popular brands. The coronavirus pandemic led its second-quarter earnings to fall 33%, but CEO James Quincey, who has led the company since 2017, has said it is trying to emerge from the crisis stronger than before.
The company plans to build new operating units focused on the regional and local level that will work closely with five global marketing leadership teams, divided up by category. The beverage categories include its namesake soda brand; sparkling flavors; hydration, sports, coffee and tea; nutrition, juice, milk and plant; and emerging categories. Global category leads will report to Coke’s Chief Marketing Officer Manolo Arroyo.
Coke is also creating a new unit dedicated to efficiency and making the most of its global scale. The organization will tackle data management, consumer analytics and e-commerce and will work in partnership with its bottlers. Barry Simpson, Coke’s chief information and integrated services officer, will lead it.