Coca-Cola Co. executives said Tuesday they plan to eliminate roughly 20% of corporate staff, as the beverage giant battles a slump in soda sales and expands a long-running cost-cutting program.
James Quincey, a company veteran who will take over as chief executive from Muhtar Kent next week, said the Atlanta-based company will cut 1,200 jobs to run a "more focused, lean corporate center."
The reductions will come from a global pool of about 5,500 employees who work in or report to headquarters in Atlanta, a Coke spokesman said.
In 2015, Coca-Cola announced it was cutting at least 1,600 white-collar jobs globally as part of a push to cut $3 billion in costs by 2019. The latest job action contributes to an $800 million expansion of that program.
The company employed more than 100,000 people as of Dec. 31, including 51,000 in the U.S. Five years ago, the company employed 150,900 people around the world. The decline reflects in part divestitures of many of its bottling operations. As a result of the divestitures, Coke has said it expects to have fewer than 40,000 employees world-wide next year.
Overseas weakness and the stronger U.S. dollar have continued to weigh on results for the company, which generates about half its sales abroad but translates results into dollars.
Coke's beverage volumes were flat in the first quarter globally, dragged down by the macroeconomic conditions in some Latin American markets and the shift of the Easter holiday into the second quarter. Soda volumes world-wide fell 1%.
Mr. Kent said the company remains on track to meet its revenue and profit targets for the year.
The beverage giant has been aiming to cut sugar from its products and diversify beyond soda as more countries consider special taxes on high-calorie drinks to combat rising obesity and diabetes, and as consumers switch to healthier beverages.
On Tuesday, Mr. Quincey said the company is adjusting its growth model to meet people's changing tastes and preferences.
"These portfolio changes will help our consumers moderate the amount of added sugar they consume," he said.
The company lifted the low end of its earnings outlook for 2017. Coke now expects adjusted earnings per share to decline 1% to 3% from $1.91 in 2016. It previously projected a decline of 1% to 4%.
In all for the latest quarter, Coke earned $1.18 billion, or 27 cents a share, down from $1.48 billion, or 34 cents a share, a year earlier. Excluding certain items, per-share earnings were 43 cents, a penny below the average analyst estimate, according to Thomson Reuters.
Revenue fell 11% to $9.12 billion but came in well above analysts' predictions for $8.87 billion. The company said foreign exchange and refranchising structural changes shaved 1% and 10%, respectively, off its revenue in the quarter.
Coca-Cola shares were little changed in Tuesday trading, up 3 cents to $43.31.
Write to Jennifer Maloney at firstname.lastname@example.org and Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
April 26, 2017 02:47 ET (06:47 GMT)