TOKYO -- Coca-Cola Bottlers Japan Holdings will seek roughly 700 employees for voluntary retirement, the company said Thursday, as rising production and distribution costs weigh on earnings.
The beverage company, which employs around 17,000 people, will offer a retirement package next month to full-time workers 45 or older. The plan includes a special allowance and help in finding a new job. The retirements take effect April 30.
Japan's top Coca-Cola distributor has struggled to improve earnings amid rising costs, deciding on price hikes for large-bottle soft drinks from April for its first price hike in 27 years. By shrinking its payroll, the company aims to boost efficiency. The company will also bring in a new president.
President Tamio Yoshimatsu, who doubles as head of core business unit Coca-Cola Bottlers Japan, will be replaced March 26 by Calin Dragan, president of the Bottling Investments Group of U.S.-based Coca-Cola Co. Yoshimatsu will become chairman with no representative rights.
Net profit for 2018 tumbled 54% to 10.1 billion yen ($91.3 million), even as sales rose 11% to 927.3 billion yen. The company incurred losses as flooding in western Japan last summer damaged production facilities. Logistics costs have risen due to labor shortages.
For 2019, Coca-Cola Bottlers Japan Holdings projects a 29% decline in net profit to 7.2 billion yen. With production spread across the country due to the flooding damage, higher transportation costs will depress earnings. Costs associated with the retirement program will also take a toll.