Strategy

Coca-Cola to Cut Workforce in Global Reorganization

The company will offer voluntary layoff packages to about 4,000 workers in the U.S. and Canada.
Lauren MuskettAugust 28, 2020
Coca-Cola to Cut Workforce in Global Reorganization

Coca-Cola is offering voluntary layoff packages to about 4,000 workers in the U.S. and Canada as part of strategic a reorganization.

The severance program will be initially offered to workers in the U.S., Canada, and Puerto Rico who were hired on or before September 1, 2017.

The company also announced nine new divisions to replace its 17 current operating units, and is creating a new unit focused on efficiency and maximizing the advantages of its global scale.

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Coca-Cola had about 86,200 employees at the end of 2019, with more than 10,000 in the U.S. The severance program is expected to cost between $350 million and $550 million.

Last month, the company reported a drop in earnings of 33% for the second quarter on a 16% drop in global unit case volume, its largest quarterly revenue decline in at least 30 years. It saw improvements in case volume in June and July as COVID-19 restrictions were lifted.

“We have been on a multi-year journey to transform our organization,” chief executive officer James Quincey said in a statement. “The changes in our operating model will shift our marketing to drive more growth and put execution closer to customers and consumers while prioritizing a portfolio of strong brands and a disciplined innovation framework. As we implement these changes, we’re continuing to evolve our organization, which will include significant changes in the structure of our workforce.”

Under the new structure, the company’s operating heads will report to chief operating officer Brian Smith. The heads of the new categories will report to chief marketing officer Manolo Arroyo.

The Platform Services organization will be headed by chief information and integrated services officer Barry Simpson.

Shares of Coca-Cola were up more than 2.3% in early afternoon trading.

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