Coca-Cola will lay off 2,200 workers – 17 percent of its global workforce – in a restructuring plan fast-tracked by the coronavirus pandemic, after people stopped buying drinks in movie theaters and stadiums during lockdown.
The Atlanta-based soft drinks giant announced the layoffs Thursday, as it looks to pare down its business units and brands after revenue plunged by 9 percent in the last quarter. It revealed around half of the cuts will be made in the US, where Coke employs around 10,400 people.
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.
Shares in Coca-Cola fell .78 percent Friday to $52.86 a share following the news. The stock is down 3.9 percent so far in 2020 from $54.99 on January 2. The latest announcement comes just four months after Coke said it was offering voluntary buyouts to thousands of employees, as the first phase of its job-cutting plan.
The company expects the latest job cuts to save it between $350 million and $550 million. The coronavirus pandemic has hammered Coke’s business. Stay-at-home orders nationwide shuttered bars, restaurants, movie theaters and sports stadiums and many sites are yet to reopen as the pandemic rumbles on. This has cut off a major revenue stream for Coke, with about half of its sales typically coming from consumers drinking sodas outside the home.
Its revenue plunged to $8.65 billion in the third quarter of 2020 from July to September, down 9 percent from the same quarter in 2019.