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Fewer people are popping open a can of Coca-Cola compared to a decade ago.
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The company has seen a decline in net revenue and profit growth has slowed. In April, Coca-Cola announced impending job cuts to yield “productivity savings.”
Coca-Cola said it expects to save an additional $800 million in productivity savings with its latest restructure, which included its latest notice to the Georgia Department of Economic Development that 421 employees based in three Atlanta offices will lose their jobs.
“Usually productivity savings is corporate speak for doing the same activities with a smaller number of people,” said Roger Tutterow, a professor of economics at Kennesaw State University.
He said as people look for less sugary drinks, Coca-Cola is diversifying its brand. In recent years, Coca-Cola has expanded its presence in the coffee, water and energy drink categories.
“At the end of the day, Coca-Cola is still one of the most respected brands and most recognized brands on the planet,” Tutterow said. “They are of course still a very important corporate citizen in Atlanta and so we’re comfortable that they’re going to continue to do well and prosper going forward. But when you’re selling consumer products, the market shifts on you occasionally and you have to be able to make adjustments.”
Coca-Cola spokesman Kent Landers said the company is looking to become a “total beverage company” and will implement 1,200 job reductions over the next year.
“The positions impacted are in our corporate organization as we redesign the work done by the corporate functions to support our new growth strategy,” Landers said. “The majority of our corporate roles are in Atlanta, therefore a significant percentage the job impacts will occur at our corporate locations in Atlanta.”
Julie Smith, president of Atlanta-based Custom Human Resources Solutions, said many companies use efficiency studies to determine just the right number of employees to hire, fire and retain. But she said getting to that number is tough.
“If a company doesn’t have enough personnel, they won’t be able to meet their production goals and by the same token, if they have too many, it’s not cost efficient,” Smith said.
She said it’s not uncommon for companies to keep tabs on employees they’ve laid off and rehire them because nationally, and in Atlanta, Smith said it’s a job seeker’s market right now.
“We’re just not seeing as much talent available, as we have in past years,” Smith said.
Correction: An earlier version of this story erroneously reported Coca-Cola “is losing money.” Instead, profit growth and revenues have slowed.