Blog: Off the job
Chris Brook-Carter | 28 October 2003
The number three soft drinks producer Cadbury Schweppes is to undergo a four-year cost-cutting program that will eliminate about 10% of its 55,000 jobs worldwide and 20% of its 133 factories. This news was followed by the announcement from industry leader Coca-Cola Company today that it will increase the number of jobs it is cutting worldwide by nearly 50%, to 2,800, from a previously disclosed 1,900.
Cadbury’s cost cutting is meant to raise its operating profit margin and help generate about £1.5 billion (€2.15 billion) in free cash flow over the four-year period. The company says it plans to pour as much as one-third of the cost savings into product innovations and increased spending on marketing to drive net annual sales growth from the average 3% it has posted in recent years to a range between 3% and 5%.
Coke, meanwhile, said it had further reviewed all worldwide operations to improve its overall efficiency and effectiveness. Coca-Cola said it expects to derive at least US$50m in pretax cost savings this year and at least US$100m beginning next year.
Investors have welcomed the initiatives, but both are the product of the fiercely competitive environment at present in the sector. Cadbury has so far refused to give details of exactly how it will spend the money and until it does there will still be some caution as to whether it can meet these growth targets.
The Coca-Cola Co has had its fair share of critics this year, from health campaigners to investor David Winters, who this week called for CEO Muhtar Kent to be replaced....
The UK health lobby is always very vocal on alcohol at this time of year, predictably so, and this year is no different. ...
“Ah, yes, you've hit upon a very sensitive area,” says Thomas, my guide at the Carlsberg Brewery in Copenhagen last Friday....
Experimentation has long been a watchword in the Scotch whisky industry. It is what has given consumers the huge range of ageing options, from refill hogsheads to virgin oak to Sherry butts....
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