The Coca-Cola Company announced August 28 that it would seek to reduce the size of its overall workforce amid depressed sales and a companywide restructuring. Job cuts will initially come in the form of voluntary buyouts for 4,000 employees in the United States, Canada, and Puerto Rico, but will also include separation offers for employees in other countries and involuntary layoffs.
While Coca-Cola did not share how many employees it expected to eventually cut, it did estimate that it would spend between $350 million and $550 million on severance programs worldwide. As of the end of 2019, Coca-Cola had about 10,100 U.S. employees and 86,200 worldwide.
The company cast the changes as part of a larger move to streamline the entire company, which also said it would cut its current slate of 17 business units to nine, focusing on Coca-Cola’s more successful brands and growth areas.
Coca-Cola CEO James Quincey described the move as part of a “multi-year journey to transform our organization.” In Friday’s statement, he said the changes to Coca-Cola’s operating model would prioritize strong brands and drive growth.
The announced move to consolidate some of Coca-Cola’s brands into a sleeker union follows the company’s July announcements that it would shut down underperforming brands, starting with juice and smoothie label Odwalla, which Coca-Cola had acquired in 2001. After recording a disappointing second quarter that saw company sales drop 28% to $7.2 billion, CEO Quincey announced Coca-Cola would make a concerted effort to kill off brands that weren’t growing as expected.
Instead, Coca-Cola will be reorienting its business focus on a handful of global categories it says have the “strongest consumer opportunities:” Coca-Cola itself; sparkling beverages; sports, coffee, and tea; juice, milk, and plant beverages; and “emerging categories.”
The company also announced it would form an organization in charge of all Coca-Cola operating units called Platform Services to centralize some company functions, including data management, consumer analytics, and digital commerce. The service, intended to eliminate wasteful intra-company duplication, will be led by current Senior VP Barry Simpson.