Coca-Cola (NYSE:KO) is about to hand out a big set of pink slips. As reported by various media outlets like The Wall Street Journal, the beverage giant said it will eliminate 2,200 jobs throughout the world, as part of a broader initiative aimed at consolidating its operations and cutting costs. All told, the company employed around 86,000 people at the start of 2020.
Of the number being trimmed, roughly 1,200 jobs are in the company's U.S. operations. This is approximately 12% of Coke's workforce in this country.
The company said the job cuts would take the form of both buyouts and layoffs. It has not yet provided further details.
Coke particularly wants to streamline the operations in its home region. For example, the North America regional operation will see a distillation of marketing efforts. At the moment, certain brands and business units have their own marketing teams; these will be consolidated to some degree.
All told, the company will devote $350 million to $550 million to severance payouts.
A reduction of the operational footprint will accompany a major reduction in the number of brands Coke manages. The company aims to trim its portfolio of 430 "master" brands to 200 of the better performers. This process has already begun, with the elimination of the storied yet weak Tab diet soda line and Odwalla juices and smoothies.
With fewer consumers going out and, consequently, chucking Coke products into their shopping baskets, the company has suffered during the coronavirus pandemic. On a year-over-year basis, both its second and third quarters saw declines on the top line. While the latter period's decline was less pronounced (at 9% versus Q2's 28%), it was still an anomaly for a company that frequently manages to post increases.