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Coca Cola announced last Thursday that it is to cut around 1800 jobs globally. This is due to the beverage giant's plan to cut about $3 billion in expenses worldwide. This plan was pre-announced in October 2014.
The company's shares rose for one percent on the same day as soon as the announcement was made.
Coca Cola has about 130,600 employees around the globe as per December 2013 statistics record, and the layoffs news came about fall the previous year. No exact figures were disclosed at the time until last Thursday's announcement.
The job cuts were due to consumers changing its lifestyle and eating habits. More and more consumers are choosing not to drink sugary soft drink these days. The consuming public's drinking preference has changed as more health conscious people take the nutritious path.
Unlike Pepsi Cola and Dr Pepper Snapple, who made their cuts a few years back, Coca Cola did not make adjustments until today.
The company's net income fell some 14% to $2.1 billion, or 48cents per share. The soft drinks sales dropped around 3.5%.
The sales drop was unpredicted by the company, and is now facing a macroeconomic dilemma that was never expected as the year started, according to Muhtar Kent, chief executive officer of Coca Cola.
However, Wall Street applauds the action made by the soft drink company. It did not address the falling sales by cutting prices but rather change its packaging, modified the amount per bottle, and reduced promotional plots. New stocks have smaller bottles and higher prices which Ali Dibadj thinks is beneficial to both the consumers and the company. Coca Cola gets to maintain its profit margins while the public will be drinking less sugar.
The "Share a Coke" marketing campaign where consumers can print names on the can or bottle was a good strategy to increase the sales for a bit.
The new Coca Cola Life, a mid-calorie soda is hopeful to make it better in the market.
