On Friday, one of the world’s most popular beverage companies announced a restructuring plan that includes voluntary layoffs of at least 4,000 of its workers. The layoffs will impact employees in the U.S., Puerto Rico, and Canada who have been with the company since September 1, 2017, or before. The century-plus-year-old-company will offer voluntary layoff packages to what it calls ‘qualified workers.’
The global severance program will cost Coca Cola anywhere from $350 million to $550 million according to the Atlanta-based company. The company has over 86,000 employees at the global level as of December 31. Of those, 10,000 were based in the U.S.
The voluntary job cuts are part of its restructuring program to streamline its portfolio and concentrate on its more popular brands. The company hopes this will help it limit the tally of involuntary job cuts it will have to undertake once the voluntary layoffs occur.
Coca Cola plans to add nine new divisions to replace 17 of its business units with new scalable products while removing duplicate resources. Its bottling investment divisions and global ventures won’t be affected by the restructuring plans.
The popular drink product company plans to focus more locally and at the regional level to build new operation units. These newer operational units will work with its global marketing teams and divide the focus between five categories: its namesake soda brand, the company’s sparkling beverages, its hydration, coffee, tea, and sports division, it’s nutrition, milk, and juice plant, and its emerging products category. Another new division will be dedicated to scalability and efficiency.
Coca Cola also plans to improve its data management, e-commerce, and consumer analytics units, while also creating better partnerships with its bottlers.
The novel coronavirus pandemic prompted second-quarter losses for Coca Cola as its earnings dropped by 33 percent. James Quincey, Coca Cola’s CEO, said the company will bounce back stronger than ever. Quincey has been at the helm of Coca Cola since 2017.
While the stock has fallen by 12 percent overall so far this year, shares rose by one percent in premarket trading on Friday. The beverage company has a combined market value of $210 billion.