Coca-Cola is to become the latest multinational company to cut thousands of jobs, setting out plans to restructure its business in response to a fall in demand after bars, restaurants and other venues closed to stop the spread of Covid-19.
“Voluntary separation” will be offered to 4,000 of the beverage maker’s employees in the US, Canada and Puerto Rico while similar schemes would be offered to an undisclosed number of workers in other countries.
The company also put staff on notice of the possibility of compulsory redundancies, although it said the voluntary reductions would limit the numbers affected. Coca-Cola, which had about 86,200 employees at the start of this year, would not say how many jobs would ultimately go, saying it would “share more information in the future”.
Coca-Cola, whose products include Fanta, Sprite and Schweppes, joins several other large global companies that have turned to job cuts following a reassessment of their plans — a trend that threatens to prolong the economic downturn triggered by the pandemic.
This week alone, the US carrier American Airlines said it would cut 19,000 jobs at the beginning of October and the UK sandwich chain Pret A Manger announced it would shed 2,890 jobs, almost a third of its workforce.
Coca-Cola’s severance plans, which the company estimates will cost up to $550m, follow the steepest drop in the group’s quarterly sales in more than a quarter of a century.
While demand for its products in the home has been robust, Coca-Cola has been hurt by the closure of social venues from cinemas to stadiums through which it normally generates about half its annual revenues.
James Quincey, chief executive, said in a statement that the company was planning “significant changes in the structure of our workforce” as part of a push to “streamline” its global business. The group, based in Atlanta, is reducing its operating units from 17 to nine.
Coca-Cola said it was “conducting a portfolio rationalisation process that will lead to a tailored collection of global, regional and local brands with the potential for greater growth”.
The global scheme will cost the group between $350m and $550m, Coca-Cola said.
The job cuts follow management changes at the company’s North America business. This week Coca-Cola said Jim Dinkins, who has led the division since 2018, was retiring after 32 years with the company. He has been replaced by Alfredo Rivera, head of Coca-Cola’s Latin America group.
Shares in Coca-Cola rose 1.4 per cent in morning New York trading. They have lost 11 per cent so far this year.