Coca-Cola restructures global operations resulting in ‘voluntary and involuntary reductions in employees’

By Mary Ellen Shoup

- Last updated on GMT

Photo: Coca-Cola
Photo: Coca-Cola

Related tags Coca-cola

Coca-Cola has announced several structural changes to streamline its global business including a consolidation of operating units, which will result in reallocation of some employees and resources, as well as a reduction to its workforce.

Coca-Cola chairman and CEO James Quincey, said the company will be implementing “significant changes” ​to the structure of its workforce to drive more growth and prioritize a portfolio of its strongest brands.

Over the past several months, Coca-Cola’s business has been challenged and the company is taking a closer look at its 400 master brands, more than half of which are single country brands generating approximately 2% of total company revenue.

The company recently discontinued refrigerated juice brand Odwalla,​ which had been in existence for 40 years (co-founded by industry veteran Greg Steltenpohl).

“This gives us the flexibility to support our investments in brands like Minute Maid and Simply and to continue to scale rising stars like Topo Chico,”​ Quincey said in the firms’s Q2 2020 earnings call when the company reported net revenue declines of 28% and a 26% decline in organic revenue for the quarter.

Streamlining of operations

The company will be reducing its 17 business units and groups to nine “highly interconnected” ​business units with more consistency in structure and a focus on eliminating duplication of resources and scaling new products more quickly.

The company’s operating leaders will report to Coca-Cola president and chief operating officer Brian Smith.

To drive future growth and support the company’s new operating units, Coca-Cola said it will be reinforcing and deepening its leadership in five global categories within its portfolio with the strongest consumer opportunities. Those five areas include: Coca-Cola (branded products); sparkling flavors; hydration, sports, coffee, and tea; nutrition, juice, milk, and plant; and emerging categories.

Global category leads for each of these segments will report to chief marketing officer Manolo Arroyo.

To support the new operating units and category focus areas, Coca-Cola has created a new organization called ‘Platform Services’ which will include data management, consumer analytics, and digital commerce capabilities.

New severance package with ‘enhanced benefits’ takes effect

The company’s structural changes will result in the reallocation of some people and resources, which will include voluntary and involuntary reductions in employees, Coca-Cola stated. Which is why, the company will offer a voluntary separation program that employees the option of taking a separation package if eligible.

The program will provide enhanced benefits and will first be offered to approximately 4,000 employees in the United States, Canada and Puerto Rico who have a most-recent hire date on or before Sept. 1, 2017. A similar program will be offered in many countries internationally.

Coca-Cola’s new global severance program is expected to incur expenses ranging from $350m to $550m, and reduce the number of “involuntary separations”​ from the company (layoffs).

The company said it is working on this next stage of design and will share more information in the future.


Related news