Coca-Cola to cut 4,000 jobs after Covid-19 hits Q2 profits
As sporting events, theaters and entertainment all shut down to stop the spread of the coronavirus, the beverage maker suffered a 32 percent plunge in net income to $1.8 billion in the April-June period while sales fell 28 percent to $7.2 billion.
The iconic American brand, that owns dozens of juice, water and soft drink labels, said it plans to cut down to nine business units from 17 currently, but will offer severance packages to employees costing between $350 million and $550 million.
"In order to minimize the impact from these structural changes, the company today announced a voluntary separation program that will give employees the option of taking a separation package, if eligible," Coca-Cola said in a statement.
"The program will provide enhanced benefits and will first be offered to approximately 4,000 employees in the United States, Canada and Puerto Rico."
The company said it will offer similar deals in other countries with the aim of reducing involuntary layoffs, but did not give details.
In reporting second-quarter results, Coca Cola did not offer a projection for the year amid the coronavirus uncertainty, but Chief Executive James Quincey said he expected the company's recovery would move in line with the prevalence of the virus.
"If we saw the virus starting to be under control, we would imagine we would see sequential improvement through the months and quarters going forward," Quincey said. "But we cannot discount that there might be further waves of lockdowns, partial or full."