ATLANTA — Atlanta-based Coca-Cola Company announced Friday a major global reorganization of its workforce that will include job cuts, both voluntary and involuntary, for thousands of employees in the U.S. and elsewhere.
The beverage giant said “to minimize the impact from these structural changes” it will offer voluntary separation packages to 4,000 employees in the U.S., Canada and Puerto Rico hired on or before Sept. 1, 2017. That covers nearly 40% of the company’s 10,800 employees in the U.S. and Canada.
Similar packages are being offered to employees in other parts of the world, the company said in a press release. Coca-Cola has 86,000 employees globally.
“The voluntary program is expected to reduce the number of involuntary separations,” the company said.
The announcement is more troubling news for metro Atlanta, where a once booming economy has been curbed as the pandemic raged and unemployment soared, though jobless rates are declining.
Coke said the global severance programs are likely to lead to expenses of $350 million to $550 million.
A spokesman declined to comment on the total number of job cuts ultimately anticipated.
Coke suffered through one of the worst quarters in its 134-year history this spring as the coronavirus pandemic took hold.
Second-quarter revenue fell 28% to $7.2 billion and net income dropped 32% to $1.8 billion from a year earlier. Coke gets about half its sales from restaurants, movie theaters, sporting events and other large public gatherings.
According to the release, a global reorganization of the company’s structure “will result in the reallocation of some people and resources.”
“The company is working on this next stage of design and will share more information in the future,” it said.
Coke has thousands of employees assigned to its headquarters in Atlanta. Many of them continue to work remotely during the pandemic.
Beverage Digest publisher and editor Duane Stanford said, “Specific roles haven’t been announced, but they are likely to be meaningful within corporate and Coca-Cola North America, so there will be an impact in Atlanta.”
Coca-Cola Chairman and CEO James Quincey said in the press release that “We have been on a multi-year journey to transform our organization. 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.”
The company is creating nine new operating units that will replace current business units and groups. The new units “will be highly interconnected, with more consistency in structure and a focus on eliminating duplication of resources and scaling new products more quickly.”
Coca-Cola currently has 17 business units within four geographical segments, as well as Global Ventures and Bottling Investments. Going forward it will have nine operating units under four geographical segments, along with Global Ventures and Bottling Investments. It also said it will have five marketing category leadership teams “that span the globe to rapidly scale ideas.”
And the company is creating an organization it calls Platform Services “to create efficiencies and deliver capabilities at scale across the globe. This will include data management, consumer analytics, digital commerce and social/digital hubs.” It said the new organization, which will be led by Chief Information and Integrated Services Officer Barry Simpson, “will eliminate duplication of efforts across the company and is built to work in partnership with bottlers.”