Coca-Cola announced that it will restructure its workforce and offer voluntary layoffs to its employees in the US, Canada, and Puerto Rico.
Shares of Coca-Cola increased by 1% in premarket trading. The stock has dropped by 12% so far this year.
According to Coca-Cola, its plan to restructure the organization involves voluntary layoff packages that will be offered to qualified employees, particularly to 4,000 workers in the Canada, US, and Puerto Rico who were signed on or before September 1, 2017. The voluntary buyouts could slash the number of involuntary job cuts that will take place.
Coca-Cola predicts that its global severance program will cost the company around $350 million and $550 million. Coke had about 86,200 employees across the world as of December 31, of which more than 10,000 were located in the US.
Meanwhile, nine new divisions will take the place of 17 business units and will zero in on new products faster and reducing the duplication of resources. There will be no changes on Coke’s global ventures and bottling investments divisions.
The plan of Coca-Cola to restructure comes as the company trim its drink portfolio to attend more to bigger and more popular brands. With the coronavirus pandemic, the company saw a 33% decline in its second-quarter earnings, but CEO James Quincey said it is trying to rise above the Covid-19 crisis.
Coca-Cola will set up new operating units that will cater to the regional and local level that will coordinate with five global marketing leadership teams. The beverage categories include its namesake soda brand; sparkling flavors; hydration, sports, coffee and tea; nutrition, juice, milk and plant; and new categories. Global category leads will be under Coke’s Chief Marketing Officer Manolo Arroyo.
Due to the coronavirus pandemic, many companies have had to slash their workforce.
In June, HSBC announced that it would remove 35000 jobs and undergo restructuring due to the impact of the health crisis on its operations.
The pandemic made the planned overhaul more urgent. According to Noel Quinn, chief executive officer of HSBC, the company has to “lift the pause” on job losses and narrow its global headcount by 15% to 200,000 over the next three years.
Walmart plans to slash corporate jobs as it merges its businesses in the US. The company has not disclosed yet the number of employees that would lose their jobs.
“We are continuing on our journey to create an omnichannel organization within our Walmart U.S. business and we’re making some additional changes this week,” Walmart spokeswoman Jami Lamontagne said during an interview with CNBC in July.