Coca Cola says the soda tax has led the company to shed 40 jobs from its Philly workforce.
The job losses are not layoffs. According to the company, largely commission-based employees like drivers, warehouse associates and sales associates have been quitting or switching to suburban roles, and their Philadelphia positions are not being replaced. Coke will also not make certain seasonal hires in Philadelphia that it usually does in the summer.
Coke, which has about 700 local employees, claimed a 32 percent decline in local sales volume so far this year and an increase in the suburbs that doesn’t make up for the Philly loss.
“Some of our commission-based employees have seen their pay decrease 30 to 50 percent due to lost sales,” said Fran McGorry, president and general manager of Philly Coke, in a release. “This has caused people to leave Philly Coke voluntarily, and we are not able to replace those positions right now.”
The news comes about two months after competitor Pepsi announced it would layoff 80 to 100 Philly workers and blamed the tax.
The Mayor’s Office is skeptical the tax is impacting the local branch of Coke and pointed toward national trends.
“The soda industry is actively engaged in litigation against the city to repeal this and has repeatedly looked for opportunities to scapegoat it,” Lauren Hitt, Mayor Jim Kenney’s communications director, said via email. “Coke had a bad first quarter and announced job cuts across all their markets earlier this week, there’s no evidence to suggest this isn’t just part of that.”
Nationally, Coke announced earlier this week it would cut 1,200 jobs after a poor earnings report. According to CNN, those layoffs are expected to happen in the second half of this year.
Coke has switched its strategy in Philadelphia by de-emphasizing 2-liters and 12-packs (competitor Pepsi has declined to offer 2-liters or 12-packs altogether).
The company’s claim of 32 percent decrease in volume of soda in Philadelphia comes close to matching consumption estimates in the first three months of the tax. In January, February and March, based on revenue brought in from the tax, consumption declined by between about 28 and 40 percent, with consumption numbers substantially increasing in March compared to February and January.
The Mayor’s Office this week announced the tax brought in $7 million in March, the highest monthly amount this year.