Coca-Cola will cut about 2,200 jobs in its global workforce as part of a broader restructuring plan that was accelerated by the coronavirus pandemic.
In the United States, Coke will use layoffs and buyouts to eliminate about 1,200 jobs, accounting for about 12% of the workforce in its home market. The news was first reported by The Wall Street Journal.
At the end of 2019, the Atlanta-based company had 86,200 global employees. But the pandemic battered its revenue and raised costs for the beverage giant. About half of its sales typically comes from consumers drinking its beverages away from home. In the third quarter, its net sales slid 9%.
Coke has responded to the crisis by expediting its plans to restructure its business and slim down its portfolio. It has stopped producing drinks such as Tab and its Odwalla brand that don't sell well and don't present much opportunity for growth. 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.
Part of its reorganization includes job cuts. In August, Coke said it would offer 4,000 workers in the U.S., Canada and Puerto Rico voluntary layoff packages.
In total, Coke expects to spend $350 million to $550 million on severance costs. The job losses do not include the employees of its bottlers.
Shares of Coke, which has a market value of $230 billion, rose less than 1% in afternoon trading. The stock is down 3% so far in 2020.
Coca-Cola to use buyouts and layoffs to cut U.S. workforce by 12 percent: Dow JonesPower Lunch