The Coca-Cola Co has announced global job cuts as part of a sweeping restructuring effort.
The soft drinks group said today it will offer voluntary and involuntary redundancies to staff around the world in an overhaul that reduces the company’s operating units by almost half. A spokesperson declined to comment on how many employees will be cut, however in the US voluntary redundancy has been offered to 4,000 staff.
Coca-Cola said similar programmes to the US will be offered in other countries and that the voluntary programme is expected to reduce the number of involuntary cuts.
CEO James Quincey said the restructuring will include “significant changes in the structure of our workforce”.
Included in the restructuring plan is a reduction of Coca-Cola’s 17 operating units to nine. A spokesperson said more information on which units are being cut will be released later.
Meanwhile, Coca-Cola will set up a new unit called ‘Platform Services’, which will be in charge of global operations including consumer analytics, digital commerce and social/digital hubs. Previously, these functions were managed at a regional level.
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By GlobalDataIn a sign of where Coca-Cola will focus in the future, the company has created five new global leadership roles that will each cover a category of key importance. The leadership roles cover:
- Coca-Cola
- Sparkling flavours
- Hydration, sports, coffee & tea
- Nutrition, juice, milk & plant, and
- Emerging categories
Coca-Cola said it is also conducting a “portfolio rationalisation process”. A spokesperson declined to give further details on whether the process will include cutting brands.
“We have been on a multi-year journey to transform our organisation,” said Quincey. “The changes in our operating model will shift our marketing to drive more growth and put execution closer to customers and consumers while prioritising a portfolio of strong brands and a disciplined innovation framework.”
The redundancy announcement may be a sign that the coronavirus has affected Coca-Cola harder than previously estimated. In March, when European countries started implementing lockdowns, Quincey told CNBC News he had no plans to lay off staff and would use economic levers other than job cuts in a bid to make the company emerge stronger once the outbreak has subsided.
In Q2 results, which cover March to the end of June, Coca-Cola posted a 26% decline in sales.
