WARNING: This is a long read. The Coca-Cola Company quietly announced on Friday, 10/22 that all 8,500 of their US-based employees will be required to be fully vaccinated against COVID-19 by 12/8. I say “quietly” because they waited until late afternoon on a Friday to send out the email, which is probably why it took until 10/25 for the first news article on this to come out (www.ajc.com/news/business/coke-offers-2000-to-employees-who-follow-new-vaccination-requirement/5622KP7DZNDKHA53F4WTSYKPEI/). As an employee at the company, I have some thoughts on how this will play out, and I believe it will play out very poorly. Here’s the facts on what’s going on internally and why I believe this will backfire tremendously:
- Coke is offering a $2,000 bonus to anyone who complies with the mandate by 12/8, including to those who provide an approved religious/medical exemption by the deadline. They’ve been extremely vague about what will happen if you don’t comply, but it’s pretty obvious that anyone who fails to comply will be terminated.
- A LOT has happened in the past year that has already disenfranchised many employees from the company. In 2020 Coke underwent their largest organizational restructuring yet where they laid off ~20-30% of their North American workforce and outsourced their jobs overseas (an initiative they labeled “Emerging Stronger”). Coke employees are still dealing with the operational setbacks from this initiative; As you can imagine, the cultural barriers alone between Western civilization and Eastern Asia require a lot of adjusting, especially when factoring in the very complicated jobs that have been outsourced (ie. financial forecasting, supply chain analysis, ERP system management, etc.). I’ve seen firsthand how difficult this outsourcing has made business operations (there are a lot of gaps in what pieces of the workload need to be prioritized, and the people getting laid off were the ones begrudgingly in charge of training their overseas replacements).
- The reasoning Coke has given for this vaccine mandate is that their contracts with federal entities (ie. national parks/museums and the military) make them fall under Biden’s vaccine mandate. Coke (and many, many other large companies) are in a tough spot where they either must comply, or risk losing all of their business with the federal government. Given how freely the government prints money to solve their short-term cash flow problems, the government can easily outlast any financial implications that will come out of this compared to businesses like Coke that do not have this option.
- Going back to the above point, the reasoning for a vaccine mandate extends far beyond the Coca-Cola Company. The entire US bottling network is comprised of over 60 different individual bottler companies that are licensed to manufacture and distribute Coke products. These bottlers have the same kind of federal contracts that the Coca-Cola Company has, which means that Biden’s vaccine mandate extends to these companies as well (so instead of just 8,500 employees being impacted, we’re now looking at several tens of thousands additional personnel across over 60 different organizations having to comply with this mandate). Further, the $2,000 bonus that Coca-Cola is giving its employees for complying does not extend to the bottlers. For those who aren’t aware, bottling operations are heavily volume-based because of how razor-thin their profit margins are. Bottlers cannot afford to provide big cash incentives like this (I’ve been in several conversations recently where bottlers complain that they can hardly keep up with the wage increases and sign-on bonuses they’re having to implement to get people to work for them – a financial challenge that is currently affecting all businesses in the country).
- This is my last point, and this is the one that is really driving the division between employees and the company. Since the very beginning of 2021 when the vaccines were introduced to wider society, Coca-Cola has repeatedly said over and over again that they would never implement a vaccine mandate onto their employees. They frequently sited legislation that would make doing so illegal, and they often sited their culture where they strive to empower their employees to make their own decisions regarding their health. With this new vaccine mandate, these promises have been exposed as lies and a lot of people in the company are not happy.
We’re living in a time where high-paid white collar workers are feeling more empowered than ever to leave their jobs for new ones. Biden’s illegal vaccine mandate has created a standoff between companies like Coke and the federal government, and truthfully no one knows what is going to happen after 12/8. If a large percentage of employees from both Coke and the bottlers do not comply, the business will truly be screwed. Coke knows this, which is why they’re willing to shell out close to $20MM in bonuses to encourage employees to get vaccinated. The legality of any of this has been thrown into the air, but at the end of the day if enough people quit or fail to comply then companies like Coke will have to choose between keeping their profitable federal contracts or risk running their businesses into the ground.