The Coca-Cola Co (NYSE:KO) announced it will be laying off 1,200 people later this year as it looks to restructure its business in the face of stalling soda sales. The company is in the process of accelerating its cost-cutting efforts as it promotes its healthier brands, including “Smartwater,” “Vitaminwater,” and “Fairlie.”
Coca-Cola, the largest non-alcoholic beverage company in the world, said it would slash at the start of the second half of 2017 and that the job cuts would carry into 2018, as it works to become “faster and more agile.” “While these necessary changes are always very difficult, they will help us do fewer things better to lead and support our operating units,” said James Quincey, CEO.
The cuts are part of a major overview of the company’s operations and aren’t concentrated in any one place. But with a weak outlook, the company will be looking anywhere and everywhere to increase shareholder value.
In the first quarter ended March 31, 2017, revenue fell 11.1% to $9.12 billion. The company earned $1.18 billion, or $0.27 per share, a 20% drop from the $1.48 billion, or $0.34 per share, recorded in the first quarter of 2016.
The soda company said it would be expanding its current productivity and reinvestment program by $800.0 million to $3.8 billion. The majority of these savings are expected to be realized in 2018 and 2019, with at least half of the savings reinvested into the company. However, the company hasn’t said in what capacity it will use the savings.
The big job cuts and cost savings initiatives come as major food manufacturers look for a way to tap into consumers’ changing tastes and attitudes toward food and beverages they think are healthier.
Coke is not the only big food company trimming its staff count. Other food giants are cutting thousands of jobs as they look to trim costs and restructure their operations. Hershey Co (NYSE:HSY) announced it is gutting 15% of its global workforce, or approximately 2,700 jobs; General Mills, Inc. (NYSE:GIS) is cutting up to 600 jobs; while Kellogg Company (NYSE:K) is chopping more than 1,000 jobs.
“Coca-Cola Is Cutting 1,200 Jobs as Growth Stalls,” Fortune, April 25, 2017.
“The Coca-Cola Company Reports First Quarter 2017 Results,” The Coca-Cola Co, April 25, 2017.