Keurigs will be forced to cut hourly workers’ wages and hours to pay for the cost of a massive expansion to a new plant in China.
The move comes as the company says it is facing a “challenging” economy and has to shift its business model to survive.
But it is the latest blow to Keurigenz, which was set up in 2010 to make coffee and ice cream.
Its biggest problem was its supply chain, which required millions of dollars in capital investment.
The plant is set to take two years to build, but it will have a huge impact on Keuriger’s ability to survive as a US business.
The company has been struggling to make money for two years as the world’s biggest coffee producer has become increasingly uncompetitive in the global market.
The new plant will employ about 150 people, with the bulk of them in China and India.
Keuriganz will be paying them less than $9 an hour in China, where wages are the lowest in the world.
In the US, Keurigers annual profit will drop to $2.7bn (£1.7 billion), compared with $3.4bn in the same period last year.
It also faces a huge restructuring of the company’s business.
It has to slash its workforce, with a major restructuring due to take place in 2020.
But in China where it has a big factory, it will also have to increase wages.
The decision will affect hundreds of thousands of workers in the US and China, who are already suffering from high unemployment and low pay.
In a statement Keurige said: “We are very sorry to have to announce this, and the cost to the company is too great to contemplate.”
KeurIGs biggest problem has been the lack of capital.
It now has about $12 billion in debt and has a $6.5 billion cash balance.
In December, Keirig announced it would cut its workforce by about 30 per cent to avoid a $4.5bn writedown.
It said it would reduce the number of people it employed from more than 8,000 in 2016 to about 3,000.
The cuts are part of a major reorganisation plan to save the company $1.8bn in 2020, a year when it is also cutting costs.
Keirige will also be cutting the number that is employed by its sales and marketing division by about 40 per cent, and by more than a third in the manufacturing unit.
Keirinig also said it was laying off a third of its workers, bringing its total workforce to about 600, including about 3.5 per cent in China that makes Keuribys coffee.
The latest moves will make it harder for Keurigans new owners to turn a profit.
The Keuribel is a new coffee brand, and it is expected to be launched later this year.
Its launch is scheduled for next month.
But the news comes just a few months after Keuriken was sold to Starbucks.
The deal closed last year, but the Keurilig deal was delayed until 2021 after the company failed to win approval for a $1 billion loan to pay off its debts.