As more consumers eschew sugary drinks in pursuit of healthier diets, Coca-Cola has found itself at a crossroads. This week, the beverage giant announced it would cut 1,200 jobs as part of an effort to accelerate growth.
In an interview on Coca-Cola’s website, president and COO James Quincey, who takes the reins as CEO on May 1, said: “This new structure we are putting in place is part of creating the culture and speed necessary to support our new growth strategy. While there will be savings and job reductions associated with these changes, our first goal is to reduce complexity, simplify processes and speed decision making.”
A Coca-Cola spokesperson told Adweek the impact of the job cuts on the company’s marketing and advertising budgets is not yet determined, but more clarity is expected in the next week.
In February, Quincey announced “Coke’s Way Forward,” a plan to transform Coca-Cola into a “total beverage company.” The plan includes reducing sugar in more than 500 of its drinks this year and globally expanding its organic tea, coconut water, dairy, coffee, juice and water brands. Coke is scaling up production of Smartwater globally and reported growth in the Gold Peak tea and Fairlife milk brands in the U.S. during the first three months of the year.
In the first quarter of 2017, global sales of Coca-Cola’s sparkling soft drinks, which make up 70 percent of the company’s value, fell by 1 percent, while its water and sports drinks were up 3 percent, and tea and coffee were up 2 percent.