Coca-Cola Announces Restructuring & Layoffs Plans For Business Growth
The coronavirus crisis has led many companies to restructure their company and Coca-Cola, the two-hundred-billion-dollar company, is one of them. On Friday, the beverage company announced a restructuring plan which includes offering a voluntary job layoffs to 4,000.
To minimize the impacts of structural changes, it has introduced a voluntary separation program in the United States. This program would provide benefits to employees who are hired before or on Sept 1, 2017. According to the press release, this similar program will be offered in many over time. The company said that this overall severance program will incur expenses ranging from USD 350 Million to USD 550 Million.
“We have been on a multi-year journey to transform our organization,” said Chairman and CEO James Quincey. “The changes in our operating model will shift our marketing to drive more growth and put execution closer to customers and consumers while prioritizing a portfolio of strong brands and a disciplined innovation framework. As we implement these changes, we’re continuing to evolve our organization, which will include significant changes in the structure of our workforce.”
According to the CBNC, Coca-Cola’s share has fallen 12% so far this year. Last month, the company announced its second-quarter earnings and it was one of the most disappointing quarter for them. Their net sales dropped by 28% and global unit case volume slipped by 16%. In late June, they announced that they would be halting all their social advertising campaigns for 30 days. Now, the company is striving to emerge stronger than ever.
The company is looking forward to building fresh new operating units that will work closely with five global marketing leading teams. These five groups will replace 17 business units that work in four geographical regions. All this revamp is expected to help the company to streamline the business and will focus on eliminating the duplication resources and fast-pacing the scaling of the products. “The company’s operating leaders will directly report to President and Chief Operating Officer Brain Smith,” Coca-Cola announces in a press release.
Coca-Cola said that currently, they’re conducting a “portfolio rationalization process” that will cumulatively form a tailored collection of global, regional, and local brands that has a greater potential for growth. The five operating units would focus on categories such as Coca-Cola, sparkling flavors, hydration, sports, coffee & tea, nutrition, juice, milk, & plant, and other emerging categories. Additionally, the company added that the leaders of these global category leads will report to Chief Marketing Officer Manolo Arroyo.
The United States company has announced the creation of “Platform services.” These services are also designed to provide services and scale functional expertise which includes government and transactional work. Moreover, it will help them to reduce their efforts for effective working in the company.
Last week, Coca-Cola named Alfredo Rivera as a new president for North America. Before its new position, he served as a president at the Latin America group managing business over 40 locations. He will be directly reporting to Brian Smith. Meanwhile, it has not disclosed any future leadership plans for the Latin American region.