Coca-Cola to cut jobs in global restructuring

Bloomberg The stock has underperformed in the past year

Bloomberg The stock has underperformed in the past year

Coca-Cola announced Friday plans to cut thousands of jobs and reduce the number of its business units due to declining beverages sales amidst the coronavirus pandemic.

The beverage giant said that in order to "minimize the impact" from the structural changes, it will offer voluntary separation packages to 4,000 employees working in the continental U.S., Canada and Puerto Rico that were hired on or before September 1, 2017.

The company was offering voluntary redundancy to 4,000 workers in the United States, Canada and Puerto Rico and would offer similar deals in other markets, it said in a statement, while also signaling other layoffs were likely to follow.

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 will also cut jobs, but did not provide details on the total planned workforce reduction. A similar buyout program will be offered to worldwide employees as well, the company said.

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The company said it would incur about $350 million to $550 million in severance expenses.

Chair and chief executive James Quincey said the business would prioritise "a portfolio of strong brands and a disciplined innovation framework".

According to CNN, Coca-Cola's saw sales drop 28% to 7.2 billion in its second quarter, which ended on June 26.

The iconic American brand, that owns dozens of juice, water and soft drink labels, said it plans to cut down to nine business units from 17 now, but will offer severance packages to employees costing between $350 million and $550 million.

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