Coca-Cola is restructuring due to the coronavirus pandemic. The number of brands and business units is decreasing. The reorganisation will cost 2,200 employees their jobs.
Belgium badly affected
The fall in sales during the corona pandemic is forcing Coca-Cola to restructure significantly: following the previous plan to voluntarily lay off 4 000 workers in the United States and Canada, there are now 2 200 more redundancies. In the United States, 1 200 jobs are being lost, some 12% of the entire workforce, but the remaining jobs are disappearing in international departments.
In Belgium, about half (95) of 191 jobs are lost. Nevertheless, the number of redundancies will be lower in reality, the soft drinks maker hopes, because there will also be new jobs for which current employees will be able to apply. Coca-Cola has branches in Anderlecht, Antwerp, Londerzeel, Hasselt and Heppignies.
With the announcement, the soft drink maker creates more clarity about the plans since this summer to downsize the organisation: Coca-Cola wants to halve its number of brands to 200. For example, Zico-cooking water and Odwalla juices are going out. The total number of business units will also be drastically reduced from 17 to nine. The company has not yet announced which specific units will be affected.
Up to 550 million dollars in costs
The company said it will use the savings to invest in brands such as Minute Maid and new products such as Topo Chico Hard Seltzer and Coca-Cola Energy. The total redundancy costs are still estimated at 350 million and 550 million dollars. At the end of 2019, Coca-Cola employed 86,200 people worldwide. The group does indicate that the bottlers will not be affected. They employ some 600,000 people.
In the third quarter, turnover at the cola producer fell by 9% to 8.7 billion dollar, mainly due to the compulsory or non-compulsory closure of entire restaurants and the disappearance of major events. The decline forced the company to speed up the restructuring, which was already under way.