Coke layoffs
January 2000: Announces cut of up to 6,000 workers (later revised to 5,200). About 2,000 people lost jobs in Atlanta.
August 2002: Eliminates 140 workers, all in Atlanta, from its information technology department.
January 2003: Cuts 1,000 employees, half of them in metro Atlanta.
September 2007: Layoffs hit 125 in North America restructuring.
March 2013: Announces layoff of 750 U.S. workers — about 180 in Atlanta — as part of integrating North American bottling operations of Coca-Cola Enterprises from earlier merger.
January 2015: Announces cut of 1,600 to 1,800 globally, including 500 in Atlanta.
Source: Staff research
Coca-Cola Co., facing sluggish sales partly because of obesity concerns, is cutting 1,600 to 1,800 jobs globally, including about 500 at its Atlanta headquarters.
Top executives of the company are reorganizing the beverage giant to shave billions of dollars a year in costs, improve efficiency and address Wall Street concerns about its recent lackluster performance.
“We do not take decisions about job impacts lightly,” Coke said Thursday in a statement. “We have committed that we will ensure fair, equitable and compassionate treatment of our people throughout this process.”
The layoffs will take place over a number of months, Coke said, as different parts of the company restructure their operations. Although the company employs 130,600 around the world, the lost positions will come from a corporate pool of about 13,000 employees globally. About 8,900 people work at the headquarters or elsewhere in metro Atlanta.
The cuts will “affect employees in all parts of the business and at various levels” of the company, spokeswoman Ann Moore said.
One of the company’s biggest critics said the pink slips are going to the wrong people.
“It’s unfortunate that Coke employees are paying the price for the failures of (Coca-Cola Chief Executive Officer) Muhtar Kent and an entrenched board,” said David Winters, CEO of investment firm Wintergreen Advisers, which has called for Kent to step down.
Joseph Agnese, an analyst with S&P Capital IQ, said more job cuts could be announced in the future.
“I think the jobs cuts identified Thursday are only a small part of the longer term streamlining and productivity initiatives the company is undertaking,” Agnese said. “While Coke has identified 1,600-1,800 positions for elimination over the coming months, I would not be surprised by additional job cut announcements in coming quarters.”
Coke hinted at that in its statement Thursday. “Productivity is an ongoing process at The Coca-Cola Company. We will continuously look for ways to streamline our business and drive growth as our business and our operating model evolve,” the company said.
The company’s largest layoff came in 2000, when 5,200 jobs were cut globally — including about 2,000 in metro Atlanta.
Thursday’s layoff announcement comes at a time when Atlanta is trying to absorb jobs lost at another high-profile employer — Turner Broadcasting System. The company, owner of CNN, Cartoon Network and TCM, announced in October it was cutting 1,475 jobs, including 975 in Atlanta.
But earlier this week, the metro area got a boost when Mercedes-Benz confirmed plans to move its U.S. headquarters to the northern suburbs, employing 800 to 1,000 people.
Atlanta Mayor Kasim Reed was bullish about laid-off Coke workers finding other employment.
“The Coca-Cola brand is a platinum brand. So individuals who had careers at Coca-Cola, I don’t think will have problem landing in very strong companies around the city of Atlanta,” Reed said.
But at 6.5 percent, metro Atlanta’s unemployment rate continues to trail the national average, currently 5.8 percent in November. (December’s national jobless rate comes out Friday.)
The pressure on Coke to cut jobs and operate more efficiently has been building for years.
“The global business climate is challenging these days and the global beverage business climate is even more challenging,” said John Sicher, editor and publisher of Beverage Digest. “Companies have to run as tightly and efficiently as they can.”
Soda sales have been in decline since their peak in the late 1990s as consumers have broadened what they drink to include water, teas, coffee, sports and energy drinks. Coke has offerings in each category, but none has sales that approach the size of the brand’s soda market, which makes up well more than half of the company’s revenue.
Coke and others in the beverage industry miscalculated the impact of health and obesity concerns on soda sales. Health officials’ persistent efforts to link sodas to the nation’s expanding waistline have made the drinks the enemy among some consumers. Last November, Berkeley, Calif., residents passed the nation’s first voter-approved tax on sugary drinks.
In Mexico, one of the globe’s biggest consumers of sugary drinks, sales nosedived after the country began enforcing taxes on sodas in January 2014.
The change in fortunes has forced Kent, Coke’s CEO, to back off from the company’s ambitious “2020 Vision” plan, which aimed to double revenue by the end of the decade.
“The goal of doubling system revenues is one our system can always aspire towards,” Kent told analysts recently. “But it is not a goal to be pursued at any cost over a fixed time frame, and we are realigning our expectations.”
Despite the challenges, Coke is not in financial trouble. Revenue hit $35 billion for the first nine months of the year, producing a profit of $6.3 billion. But growth in the number of cases sold across the world has slowed — especially in North America — causing concern on Wall Street because case volume has been a long-term measure of the company’s underlying financial strength.
Coke has taken steps to try to address the issue, partly by beefing up its marketing and partly through new products and packaging. It bought a 16 percent stake in Keurig owner Green Mountain Coffee Roasters, hoping consumers will make carbonated beverages at home. The company also purchased a stake in energy drink leader Monster, is partnering on a premium milk brand FairLife, and has released 8-ounce sodas for those who are calorie conscious.
Staff writers Katie Leslie and Michael E. Kanell contributed to this report.