Coke layoffs leave shops to pick up slack

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Coca-Cola Co.'s reduction of some 1,000 staffers last week, including hundreds from its marketing departments, could result in more work for agencies that handle the soda giant's promotions.

Shops like Interpublic Group of Cos.' Momentum may pick up additional national promotions, Publicis Groupe-backed Burrell Communications in Chicago could take on more urban promotions, and WPP Group's Ben Marketing in Atlanta more regional promotions. Clear Channel Communications' CMI could do more event marketing, while WPP's Fusion5 in Westport, Conn., and Creative Artists Agency in Los Angeles could pick up more corporate consulting.

"Agencies always have the manpower. Things have to get done if they're important issues, so the people [at Coke] will have to work harder, and the agencies will get more involved," said one executive familiar with the company.

Coca-Cola did not return calls by press time, and the agencies either referred calls to the company, could not be reached or said they did not know what the implications would be.

Layoffs were said to be across-the-board and included some directors and VPs, but many affected were lower-level employees. It's uncertain how many people were laid off in each department, though some have speculated marketing might have lost up to 30% of its total staff. The promotions staff was hit especially hard, two executives said.

While some non-traditional shops may be in for a windfall, others could be in trouble if the Coca-Cola staffers with whom they have worked were issued pink slips. Coke managers on March 27 had one-on-one discussions with every employee, according to people familiar with the matter. Some were offered severance packages, while those remaining were told how they would fit into the new organization.

new model in april

In January, the world's largest soft-drink company said it planned to lay off 1,000-or 8%-of North American staff and combine its three primary North American units-Coca-Cola North America, fountain and the Minute Maid Co. Half of those laid off were at the Atlanta headquarters, while the other 500 were located around the country.

The streamlined model will be unveiled in April and should be up and running by May, in advance of the summer selling season, said another person familiar with the plans. Marketing, however, is pretty much locked up. Its major new product, Sprite Remix, is ready for launch in the spring. Bottlers were braced for the winnowing.

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