The Coca-Cola Co (NYSE:KO) layoffs in Atlanta will impact more than 350 employees. Most of the job cuts will be observed in the management sector of the beverage company at facilities across metro Atlanta. These Georgia layoffs in metro Atlanta will affect the workforce at two facilities in Atlanta and another in Alpharetta.
The Coca-Cola layoffs in Atlanta were expected to start on February 28, but now will be spread out over the next few months. These cuts are part of the company’s cost-cutting measures, which will help it save up to $800.0 million a year.
The company filed WARN notices with the Georgia Department of Economic Development earlier, regarding 53 job cuts.
Coca-Cola’s Revenue for the Fourth Quarter Declined by 20%
Coca-Cola’s fourth-quarter results revealed that the company’s net revenue dropped 20% to $7.5 billion for the quarter and 15% to $35.4 billion for the complete year. Coca-Cola’s revenue decline was driven by structural headwinds of 26% and 17%, respectively. For the quarter, water, coffee, and tea beverages like “Honest Tea” increased by two percent. Carbonated soft drinks remained flat while juices, dairy, and plant-based beverages dropped two percent. Q4 earnings were down because of a $3.6-billion one-time charge related to the new U.S. tax laws.
Cash from operations for 2017 was $7.0 billion, a drop of 20%. Free cash flow for the year was $5.3 billion, a decline of 19%. The drop was related to the re-franchising of North America bottling territories. For 2017, Coke reported net sales of $35.4 billion, which was 15% less compared to the previous year. Beverages like sports drinks and water performed best.
Diet Coke Sales Declined
Coca-Cola announced it would revamp “Diet Coke” in January, planning to make the cans more slender and colorful. This modification came as Diet Coke sales were down a staggering six percent in just the last three months of 2017.
In the mid-2000s, soft drink consumption was at its peak. Americans consumed 53 gallons of soda per person annually, which comes to be more than half a liter per person per day. Now those levels are down by nearly half and are expected to continue to drop. This decline is thought to be because of a change in the public’s perception of healthy food and drinks.
A decade ago, Diet Coke was considered a healthy choice because it had no sugar or calories. But now, people have concerns about artificial sweeteners, which may lead to weight gain, so they no longer favor it. Moreover, government research has proven that daily consumers of diet soda are at a higher risk of heart diseases and strokes.
Because of growing health concerns among consumers, the company is working hard to modify its products so they look more appealing. But it probably doesn’t matter, because the younger generation is smart enough to understand what they are consuming. If this continues, the trend of job cuts, like the recently announced Coca-Cola layoffs in Atlanta, will go on.
“Coca-Cola announces more layoffs,” CBS46 News, February 27, 2018.
“The Coca-Cola Company Reports Strong Operating Results for Fourth Quarter and Full Year 2017; Achieves or Exceeds the Company’s Full Year Guidance,” The Coca-Cola Company, February 16, 2018.
“Coca-Cola beats earnings, as Coke Zero and other new drinks offset flat volume,” CNBC, February 16, 2018.
“Diet Coke Is In Decline. And the Latest Revamp Might Not Help,” Fortune, January 14, 2018.
“Diet Coke’s Moment of Panic,” The Atlantic, January 14, 2018.