Coca-Cola Layoffs: 2,200 To Lose Jobs As Company Suffers Revenue Decline

Coca-Cola announced Thursday that its plans to lay off 2,200 workers as it suffers a decline in revenue amid the coronavirus pandemic.

The company will be cutting 1,200 jobs in the U.S., including 500 in Atlanta, where Coca-Cola is headquartered. The layoffs would not affect the company’s bottlers, which are largely an independent unit. The reductions would cost the soft-drink giant up to $550 million in severance packages.

The job cuts come as no surprise after the beverage company announced it was planning voluntary and forced cuts in late August. In Atlanta, most of the separations were voluntary.

Over the summer, Coca-Cola also revealed that it offered voluntary separation packages to 40% of its workforce in the U.S., Puerto Rico and Canada. More than 4,000 employees who were hired on or before Sept. 1, 2017, were eligible for the package.

Coca-Cola’s revenue relies heavily on consumers drinking its beverages. However, the coronavirus pandemic has forced movie theaters and other entertainment venues to shut down, and that's led to the company’s revenue falling by 9% in the third quarter.

The company saw all four of its Coke drink categories decline in unit case volume. Sales of its juice, dairy and plant-based beverages saw a 6% decline. Unit case volume for Coca-Cola’s enhanced water and sports drinks fell by 11%, while the demand for its tea and coffee lines dropped by 15%.

Coca-Cola has been facing challenges in recent years as more consumers scale back on sodas and sweetened drinks. The struggle, which was exacerbated by the COVID-19 pandemic and subsequent shutdowns, has reportedly prompted the company to restructure its business.

“We’ve been challenging legacy ways of doing business, and the pandemic helped us realize we could be bolder in our efforts,” Coca-Cola Chairman and CEO James Quincey said.

Coca-Cola will be cutting 200 of its brands, nearly half of its beverage portfolio, to concentrate on more profitable categories. The company will stop producing brands that do not have much room for growth, including Zico coconut water, Tab and Odwalla juices.

The company plans to create new operating units tasked with working with five global marketing leadership teams. It also intends to nvest in growing brands, such as Minute Maid, Simply juices and Coca-Cola Energy.