Coca-Cola Company (KO.US) firmly believes in "AI + manufacturing" and plans to lay off over 600 people in the South African market.

Media reports cited Dominique Swartz, a spokesperson for the Food and Allied Workers Union, revealing that a large bottling plant owned by global beverage manufacturing giant Coca-Cola Company plans to lay off over 600 employees in South Africa. This also indicates that Coca-Cola Company will increasingly focus on digitalized bottling acceleration under the ambition of "AI + Manufacturing," as well as a broader digital factory and manufacturing efficiency upgrade plan. According to analysts, the application of new artificial intelligence (AI) technology in the manufacturing of limited edition Coca-Cola Company products has been receiving positive sales in markets such as the United States, Canada, and Australia. The use of AI in manufacturing and research and development is expected to become a key factor for Coca-Cola Company to enhance operational efficiency and market competitiveness, but the expansion of AI penetration also means higher unemployment rates. The report stated that the parent company of Coca-Cola Company's large bottling plant, Coca-Cola Beverages South Africa, has issued notices to employees about possible layoffs and has initiated consultation processes. The report also mentioned that the company has not made a final decision yet. Trade unions have opposed the layoffs. The Coca-Cola Beverages South Africa subsidiary began operating in its current form in 2016 after the merger of six non-alcoholic beverage bottling businesses. The proposed large-scale layoffs by Coca-Cola Company are another blow to the country; South Africa already has a high unemployment rate, and the impact of artificial intelligence is becoming more severe. Other major companies such as Ford Motor Company, Glencore Plc, and ArcelorMittal SA ADR have also announced plans to cut thousands of jobs in this largest economy in Africa. The aggressive tariffs imposed by the United States, led by President Donald Trump, on exports from South Africa could exacerbate the labor market crisis. The central bank of the country estimates that the increased tariffs could lead to the loss of around 100,000 jobs, with the automotive and agriculture industries being the most vulnerable under the pressure of tariffs. In terms of stock prices, with the continued weakness in the US job market and non-farm employment numbers, doubts are rising about the resilience of the US economy, and the stock prices of most consumer blue-chip companies, including Coca-Cola Company (KO.US), have significantly underperformed the S&P 500 index this year. "AI + Manufacturing" is expected to greatly boost operational efficiency and profit margins In the second half of 2023, Coca-Cola Company launched a limited edition soft drink manufactured using new artificial intelligence (AI) technology, the "Coca-Cola Company Y3000," which was promoted as the "first futuristic flavor new beverage created by humans and AI together." This beverage has been in high demand since its launch, and during the 2024 Christmas shopping season, the Y3000 Zero Sugar sold out quickly in the Australian market. Artificial intelligence may significantly increase the productivity of human society and is a key piece to the future prospects of traditional manufacturing industries, at least in the eyes of Coca-Cola Company. The company aims to enhance the manufacturing efficiency and product development capability of flagship Coca-Cola Company products and other branded products through data-driven AI technology, and to drive innovation in its global business to boost profit margins. The company also aims to develop and integrate AI applications across its various business lines to improve overall operational efficiency. Looking ahead to the future trends of Coca-Cola Company, analysts believe that the application of AI in manufacturing and research and development will be a key factor in enhancing its operational efficiency and market competitiveness. The integration of AI agents or AI generative applications in traditional manufacturing industries could lead to the rapid, accurate analysis and processing of large amounts of data, thereby improving production efficiency in the manufacturing industry. AI could also help predict potential equipment failures by modeling and analyzing historical production data, thus helping companies reduce maintenance costs and take preemptive measures to avoid deeper threats. The short-term effects of AI on profit margins and operational efficiency for Coca-Cola Company are more likely to first manifest in manufacturing efficiency/maintenance and enterprise assistant areas, while the value of AI in research and development and upstream raw material areas may be released over a longer period. In terms of AI agents/enterprise-level GenAI applications, Coca-Cola Company has signed a strategic five-year partnership with cloud computing leader Microsoft Corporation to streamline operations, improve customer and frontline business support efficiency using Azure OpenAI digital assistants. This lays a foundation for further embedding "AI agents" into supply chain, quality, procurement, and planning decisions in the future. Additionally, the two companies plan to jointly develop large-scale AI application platforms across business functions, spanning marketing, product development, manufacturing, and supply chain areas. In the bottling sector in North America (such as Coca-Cola Consolidated), Coca-Cola Company has showcased globally the line visualization, collaboration, and monitoring capabilities driven by NVIDIA Corporation AI GPU clusters/real-time AI digital engines, pointing towards broader digital twin/real-time decision-making applications. In the official NVIDIA GTC sharing, the Coca-Cola Consolidated team demonstrated how real-time monitoring, collaboration, and physical-based rendering (PBR) visualization driven by NVIDIA Corporation GPU computing power clusters could be used to update and accelerate manufacturing operations and problem resolution.