Due to a decrease in sales caused by reduced demand for sugary drinks, Coca-Cola stated its plans to let go of 20% of its corporate workforce.
Cost cutting efforts:
The American giant announced that by the end of this year it will terminate around 1,200 jobs in order to increase their target of cost-cutting by $800m. By 2019, the company is expected to save around $3.8bn.
As per the Associated Press, FactSet stated that the number of jobs cut is around 22% of the company’s 5,500 corporate employees, and represents 1% of its full labor force of around 100,300 employees.
During the first quarter of 2017, Coca-Cola’s worldwide sales dropped by 1% due to customers becoming more conscious about health and preferring to stay far from drinks containing an elevated content of sugar in both the US and Europe.
The company stated that its adjusted full year profits are expected to fall between 1% and 3%, in comparison to the 1% and 4% it had previously forecasted back in February.
Health conscious customers:
Companies in the food and drink industries are now in a tight spot where consumers are becoming more and more health conscious which leads the companies to try and find ways to sweeten their products in healthier ways.
Nestlé, the parent company of famous chocolates such as Aero and KitKat, stated last year that it had a scientific development where it has been able to reduce the sugar inside its products by almost 40% without the taste being impacted negatively.
Nestlé followed Pepsi’s suit in spending huge amounts of money in research to be able to manufacture new and healthy beverages and snacks, while changing the formulas to existing brands in order to cut the sugar, salt, as well as fat content in them.
Last year, Coca-Cola changed the name of Coke Zero in the UK to Coca-Cola Zero Sugar and changed its recipe so it “taste more and look more” similar to the original beverage, according to the company.
The campaign advertising the change cost an average of £10m.