Coca-Cola Co. confirmed that the worlds largest beverage company will trim its workforce as much as 1% as a counter measure to falling soda sales.
The company said in an emailed statement that it had sent out the first notifications today and more working places will be axed during the coming months, outlining that the workforce trim will be focused on white-collar jobs.
Coca-Cola, which also makes Fanta, Sprite and Dasani, will reduce it employees by 1 600 to 1 800 primarily from its corporate departments, including around 500 from its Atlanta headquarters.
The employee trim is the largest since 2000, when Coca-Cola axed more than 5 000 staffers due to a similar situation of declining sales and profit.
As of now the company will not reduce its worker numbers engaged in bottling and distribution, an areas which employs around 90% of Coca-Colas 130 000 staff.
However, a Coca-Cola spokeswoman said that the company may axe more jobs as it is “looking continuously for ways to streamline the business.”
In October CEO Muhtar Kent announced a $3 billion cost-cutting plan, after the company reported global sluggish sales growth and said it would not reach its previously announced sales targets.
“We are redesigning our operating model to streamline and simplify our structure and accelerate the growth of our global business,” Coca-Cola said.
Coca-Cola, which distributes its products in all countries expect Cuba and North Korea, has been facing sales troubles as more and more people become involved in fighting obesity and the negative effects of artificial sweeteners.
The company intends to tune down bureaucracy by implementing standardized working protocol across regional businesses, including offices in Mexico City, Hong Kong, Istanbul and London, people familiar with the matter have said.
Coca-Cola will also implement a zero-based budgeting, a move which will force managers to justify all expenses every year. The cost-reduction plan is expected to finish by 2019.
As employees part ways with the company, they will be given a “strong transition assistance,” the spokeswoman said, including severance and outplacement services.
Coca-Cola gained 1.25% on Wednesday and an additional 1.21% on Thursday to close at $43.51 in New York, marking a one-year change of 8.94%. The company is valued at 188.30 billion. In pre-market trading on Friday the stock climbed 1.21% to $43.51 at 10:25 GMT.
According to the Financial Times, the 20 analysts offering 12-month price targets for The Coca-Cola Co have a median target of $45.00, with a high estimate of $53.00 and a low estimate of $37.00. The median estimate represents a 4.68% increase from the last price.
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