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Coca-Cola to effect across-the-board job cuts

Neena Haridas in New Delhi

About 80 heads are likely to roll out of Coca-Cola India, a subsidiary of the US-based soft drink major, as part of its parent company's global restructuring programme.

According to a senior official of Coca-Cola India, "the 10 per cent lay off will be across-the-board and will include senior executives as well."

The Indian operation is one of the worst hit in percentage terms. The Coke official said, "In India, the restructuring is absolutely necessary because we are in the process of consolidating our bottling plants. We had started this consolidation process nearly two years ago. There is lot of underutilised and unwanted employment in the plants. For instance, we have three plants in the National Capital Region and each one has a senior manager or executive. Obviously, we don't need so many, hence we have decided to consolidate it and have regional heads. We have currently about 800 staff and about 80 will be laid off. However, we are still in the process of deciding on the heads that will actually roll out. It will be settled soon and they will all be given a golden handshake as per the rules that apply."

In fact, Coca-Cola India had announced a voluntary retirement scheme two years ago. This retirement programme was initiated to streamline the bloated workforce and resulted in a major lay off in the company's bottling operations again.

The parent company Coca-Cola, based in Atlanta, the USA, had announced its decision to lay off 6,000 jobs -- 20 per cent of its global workforce -- on Tuesday. Of these, 2,500 heads would be chopped from the corporate headquarters in Atlanta and 800 in the United States and rest from the overseas operations.

It may be recalled that the soft drink major had been on a low swing in comparison to its rival Pepsi of late. Asked as to why Coca-Cola was maintaining a low profile this year, Rahul Dhawan, director, external affairs, Coca-Cola India, said, "We don't have the money to go for high-profile advertising and promos. In any case the soft drink companies have been very badly affected in the last one year."

He said, "Growth has slipped by 20 percentage points year-on-year in the last fiscal year to March 31, 1999 to five per cent. The accumulated loss of the whole industry is about Rs 6 billion ($ 139 million)," he said.

The government's excise duty on soft drinks, Dhawan said, increased by 66 per cent in the last two years, while product prices rose only 28 per cent. "Government will have to rationalise the excise duty structure," he added.

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