Beverage company Coca-Cola said Thursday it's laying off 2,200 workers, or 17% of its global workforce, as part of a larger restructuring aimed at paring down its business units and brands.
The Atlanta-based company said around half of the layoffs will occur in the U.S., where Coke employs around 10,400 people. Coke employed 86,200 people worldwide at the end of 2019. It said the severance programs will cost between $350 million to $550 million.
Thehas hammered Coke's business, as sales at places like stadiums and movie theaters dried up due to lockdowns. Revenue fell 9% to $8.7 billion between July and September. The downturn forced the company to accelerate a restructuring that was already underway.
"We've been challenging legacy ways of doing business, and the pandemic helped us realize we could be bolder in our efforts," Coke CEO James Quincey said during an earnings call in October.
Ditching brands and products
Coke is reducing its brands by half to 200. It shed multiple slow-selling brands this year,, Zico coconut water, Diet Coke Fiesty Cherry and Odwalla juices. Coca-Cola's first-ever "diet" soft drink, Tab, was introduced in 1963 and in the following years became a cultural touchstone. But sales started to slide after Diet Coke was introduced in 1982.
The company said it will use the savings to invest in growing brands like Minute Maid and Simply juices and fund the launch of new products like Topo Chico Hard Seltzer, Coca-Cola Energy and Aha sparkling water. Coke is also reducing its business segments from 17 to nine.
The company began offering voluntary buyouts to 4,000 employees in Canada and the U.S. in August. Under the buyout, the highest paid employees will get lump payments of a year and a half of pay, plus 20%, the Atlanta Journal-Constitution reported. Coke wouldn't disclose how many employees took those offers.
The layoffs won't impact Coke's bottlers, which are largely independent. Including bottlers, the company employs more than 700,000 people worldwide.