​Coca-Cola to cut 1,200 jobs to meet savings target

Coca-Cola said it expects full-year adjusted profit to fall 1-3 percent, compared with the 1-4 percent decline it forecast in February.
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Coca-Cola Co has said that it would cut about 1,200 jobs as the beverage maker expands its savings target amid falling demand for fizzy drinks globally.

Shares of the Dow component were up marginally at $43.39.

Coca-Cola and rival PepsiCo Inc's soda sales have taken a hit as consumers in North America and Europe increasingly shun sugary drinks.

Coca-Cola said, Global soda sales fell 1 percent in the first quarter ended March 31.

The Atlanta-based company said it was increasing its cost-cutting target by $800 million in annualized savings and now expects to save $3.8 billion by 2019.

The majority of the additional savings would come from the corporate job reductions, incoming Chief Executive James Quincey said on a post-earnings conference call.

The company, which also reported a smaller-than-expected quarterly profit, said it expects to reinvest at least half of the $800 million saved to mainly boost growth in its non-carbonated drink business.

Nik Modi, Capital Markets Analyst, RBC, said, "We are not too worried about this quarter's miss. The important thing is that KO is raising its cost-saving estimates and we believe there is more to go."

The job cuts would start in the second half of 2017 and carry into 2018, Coca-Cola said.

Coca-Cola said it expects full-year adjusted profit to fall 1-3 percent, compared with the 1-4 percent decline it forecast in February.

The company is offloading much of its low-margin bottling business to reduce expenses, but costs associated with the refranchising have been higher than expected, weighing on profit.

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