Coca-Cola is planning to cut 2,200 jobs, including 1,200 in the U.S., as it continues to regroup from declining sales amid the coronavirus pandemic.
The cuts amount to roughly 12% of Coke’s U.S. workforce and will be made through a combination of buyouts and layoffs. The company had about 86,000 employees at the start of the year.
Coke has been “trimming expenses and products amid the closures of restaurants, bars, movie theaters and sports stadiums that sell its drinks around the world,” The Wall Street Journal reported.
Coke’s revenue fell 9% to $8.65 billion in the quarter ended Sept. 25 after dropping 28% in the second quarter. It announced in late August it was planning voluntary and forced job cuts and has also said also it would cancel about half of its beverage portfolio to focus on products that are growing and can achieve a large scale.
The company expects the latest job cuts to result in annual savings of between $350 million and $550 million.
“We are focused on ensuring that structure follows strategy, and this has been a guiding principle in people-related decisions,” a spokesperson said. “We have been intentional about ensuring decisions about roles are driven by future organizational needs.”
The Atlanta Journal-Constitution said the cuts highlight Coke’s “continued challenges after more consumers began scaling back on sodas and other sweetened drinks in recent years. Those struggles have been exacerbated by the pandemic as fewer people visit restaurants, triggering some of the worst financial results in the company’s 134-year history.”
Coke normally derives about half its sales from public venues such as restaurants, movie theaters, and sports stadiums.
The restructuring will allow the company to function more like a network needing “less decision making, less bureaucracy, and ultimately [fewer] people,” Coke CFO John Murphy said last month.
Coke’s profit in the latest quarter fell about a third from a year ago to $1.74 billion. In trading Thursday, its shares fell 0.4% to $53.27.