Coca-Cola Offering Voluntary Buyouts as Part of a Restructuring

Coca-Cola (NYSE: KO) announced voluntary job cuts and restructuring efforts on Friday that will affect its global operations and product line. While favorites like the company's classic cola are not on the chopping block, niche products might soon disappear from a supermarket near you.

One of the goals of the restructuring is to become a leaner organization, and along with that come job cuts. In the first round of eliminations, voluntary severance packages are being offered to 4,000 workers in the U.S., Canada, and Puerto Rico. Coca-Cola is expecting to pay between $350 million and $550 million in severance for the terminations.

Coke said in the announcement that it will reorganize its 17 business units into nine, which will continue operating under four geographical segments, plus global ventures and bottling. The units will work with five global marketing teams to streamline the company's organization and scale ideas quickly to different regions. Among the categories it will focus on are: Coca-Cola, sparkling flavors, hydration, sports, coffee and tea, nutrition, and juice.

Friends drinking cola.

Image source: Getty Images.

Coke says it is launching a new system called platform services that will support the regional units and provide the digital framework for the entire operation. These services include data collection and management, e-commerce, and other digital and social components.

Coke had a tough second quarter, ending July 3, with a 28% sales decline, worse than rival Pepsico's 3% drop.Shares of Coca-Cola are down 13% year to date as of Friday morning.

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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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