The Coca-Cola Co. plans to eliminate about 6,000
jobs, or about one-fifth of its work force, as part of a major
restructuring at the world's largest soft drink maker.
The job cuts announced Wednesday — the largest in the company's
113-year-history — will affect 2,500 positions at the company's
Atlanta headquarters, 2,700 outside the United States and 800 jobs
elsewhere in the U.S.
The job eliminations represent about 21 percent of the company's
29,000 worldwide work force.
It is the latest move by the Atlanta-based beverage company to
improve its profitability since president Douglas Daft was
designated to become chairman and CEO after its April shareholders'
meeting.
Daft, who will succeed M. Douglas Ivester in the company's top
posts, called the job reductions "painful both for those within
the company who will be directly affected and for those responsible
for making this decision."
Coke estimated that the cuts will save $300 million.
It will take an $800 million charge before taxes this year to
cover costs of the realignment. Laid-off workers will be offered
severance packages, outplacement and counseling, Coke officials
said.
The announcement came as Coca-Cola reported fourth-quarter
earnings that slightly exceeded Wall Street expectations.
But weak profits for the year have been a drag on Coke's stock
price. In morning trading on the New Yoirk Stock Exchange, Coke
shares were down $1.25 1/2 at $64.62 1/2.
Daft has made a number of personnel moves in recent weeks and is
trying to decentralize Coke's operations so the company can react
more quickly to local conditions.
Today, Daft conceded that a product recall over a health scare
in several European countries last year had been "a wake-up call"
that made company officials realize they were not well-prepared to
respond to local situations.
The size of the cuts surprised many analysts who had predicted
Coke would trim 2,000 to 4,000 jobs.
But Daft said the 6,000 figure was chosen after a six-month
review of the company's entire operation.
"This was not a targeted number. There was no sense of saying
we need to reduce x-number of positions," Daft said in a telephone
interview this morning.
"The concept was what business structure do we need for the
future? And once you do that ... then you come up with a new
organizational structure and that's where you put your people, and
then you come up with a number."
