Like many other global companies, the novel coronavirus pandemic has also hit the global beverage giant Coca-Cola Co hard. The company has said that it was going to lay off thousands of workers in response to the coronavirus crisis. The company said that it was also looking to offer voluntary deals across its businesses and promised to being down the number of operating units of the company by 50 per cent.
Coca Cola said in a statement that voluntary redundancy to 4,000 workers in the United States, Canada and Puerto Rico was being offered by the company and similar offers would also be made to employees in other markets also where it operates. In the statement the company also signaled that it would also likely implement other layoffs soon.
“The voluntary program is expected to reduce the number of involuntary separations,” the largest beverage maker of the world said. The company added that it will have to incur a total cost of between $350 million to $550 million for its operations all over the world in it implementing the global severance programs.
Closures of bars, restaurants and cinemas due to business restrictions imposed by government authorities all around the world to curb the spread of the novel coronavirus pandemic has severely hit the sale of the company. It said that bars, restaurants and cinemas are the outlets where the company normally sells heavily.
Coca Cola said that it would also be implementing a restructuring of its company structure. The company will now have nine operating units that would sit under four geographical segments alongside its global ventures and bottling investments divisions.
Its current model includes 17 business units.
The decision of the company to cut jobs coincides with the development of the number of Americans who are filing new claims for unemployment benefits remaining on and around the 1 million mark last week. The government also confirmed that for the second quarter, the American economy suffered its worst contraction in at least 73 years.
It was preparing the biggest pilot furloughs in its history signaled United Airlines Holdings Inc on Thursday. The company said that it was planning to reduce the number of total pilots for it by about 21 per cent because of the severe slump in the air travel because of the pandemic induced restrictions.
Announcement of shedding of thousands of jobs have also been made in recent weeks by cosmetics maker Estee Lauder Cos Inc and oilfield services giant Schlumberger NV.
A 28 per cent drop in its sale in the second quarter was reported last month by Coca Cola because of the pandemic, which the company termed as the “most challenging” quarter of the year, forcing the closure of restaurants, theaters and sports venues.
Shares in the company rose about 1 per cent in early trading in the United States.
(Adapted from EconomicTimes.com)