Coca-Cola To Reduce Workforce Through Voluntary, Involuntary Layoffs

Coca-Cola (KO) said it will restructure its business, which will include a series of voluntary and involuntary job cuts as it reallocates people and resources.

Under the restructuring program, the company will offer voluntary separation to about 4,000 employees in the U.S., Canada, and Puerto Rico. The package will be based on the most recent hire date of Sept. 1, 2017. Coca-Cola also said a similar program will be offered in “many” international countries as well.

Through the voluntary separations, Coca-Cola said it expects to reduce the number of involuntary cuts. The company said it will take a charge of about $350 million to $550 million for severance payments.

The beverage giant will also reorganize its business operating units, cutting back from 17 to nine operating units as part of an effort to streamline its organization. Through the reduced number of operating units, Coca-Cola said it will reduce duplication of resources and be able to scale new products more quickly.

The business units will report to Brian Smith, president and chief operating officer at Coca-Cola. The company’s Global Ventures and Bottling Investments divisions will also remain.

In addition, the company will structure into five beverage segments, including Coca-Cola; sparkling flavors; hydration, sports, coffee and tea; nutrition, juice, milk, and plant; and emerging categories. The category leaders will report to Manolo Arroyo, chief marketing officer for the company.

Coca-Cola also said it has created a Platform Services division that will focus on service of operating units, categories, and functions to deliver greater efficiencies and capabilities globally. Platform Services will be headed by the senior vice president and chief information and integrated position.

“We have been on a multi-year journey to transform our organization,” James Quincey, chairman and CEO at Coca-Cola, said in a statement. “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."

Shares of Coca-Cola were trading at $48.83 as of 9:48 a.m. EDT, up 60 cents or 1.23%.