In the recent round of layoffs by leading companies, Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) is the next one to layoff up to 2,000 employees in the next few weeks. These layoffs are a part of Coke’s cost cutting program after facing drop in profits during its recent quarter.
The beverage company announced cost-cutting program after its third quarter 2014 financial results and the company is aiming at $3 billion under the program. Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE)’s net revenue dropped 2% year-to-date, as mentioned in its third quarter reports. This is the largest layoff announcement made by the company in the last 15 years and the beverage company is following a strict internal operations budget.
The layoff notices are likely to go out by January 8 for the North American employees January 15 for their global peers. As many as 10% of the corporate staff is likely to lose jobs in the global regional offices and the employees at the headquarter of Coke are likely to take a hit during these layoffs. The majority of job cuts would occur in the bottling and distribution units of Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE).
The beverage company said that the current restructuring is likely to extend up to 2019, although the investors and analysts are considering these measures inadequate for the company’s turnaround. According to Ali Dibadj, Sanford Bernstein,
“Their track record in cutting costs has not been very strong, so there’s a reluctance among investors to believe in them.”
Another problem with the company is its hierarchal job grade levels with up to 20 grade scales, which makes decision taking slow.
While talking about the job cuts, a spokeswoman for Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) said that the company is still trying to figure out the exact number of job cuts and the laid off employees would be able to apply for the other vacant positions in the beverage maker.
This article has been written by Prakash Pandey.