PepsiCo Layoff’s Hundreds Of Workers From Corporate Jobs

According to sources familiar with the situation and papers analyzed by The Wall Street Journal, PepsiCo Inc. is cutting jobs at the headquarters of its North American food and beverage businesses as a sign that corporate austerity measures are not limited to the IT and media industries.

The move also could foreshadow more job cuts at big companies across the U.S. as businesses grapple with higher costs, slower growth, and intensifying competition. PepsiCo declined to comment on the layoffs, which began last week. 

The people familiar with the matter said the company is offering buyouts to some employees and has told others they will be laid off. It isn’t clear how many jobs will be affected. 

The company employed about 263,000 people worldwide as of late September. In recent years, PepsiCo has been shifting its focus to healthier products, such as bottled water and snacks made with whole grains, as consumer tastes have changed. 

At the same time, it has been cutting costs and shedding some less profitable businesses. Last year, it sold its Tropicana orange-juice business to a Brazilian investment firm. 

In August, it announced plans to spin off its soda business as a separate company. And in October, it acquired SodaStream International Ltd., a maker of home carbonation machines, for $3.2 billion.

According to people familiar with the matter, hundreds of jobs will be eliminated at PepsiCo Inc. as the beverage and snack giant looks to streamline its operations.

The cuts affect the company’s North American beverage business, which is based in Purchase, New York, and its North American snacks and packaged-foods business, which has its headquarters in Chicago and Plano, Texas.

The company has informed employees of the layoffs in a memo, which The Wall Street Journal viewed.

In the memo, PepsiCo addressed employees that the layoffs were aimed “to simplify the organization so we can operate more efficiently.” 

The people said the cuts will be more in the beverage business because the snacks unit already has trimmed positions with a voluntary retirement program. How many jobs would be cut from each division was unclear.

PepsiCo didn’t quickly respond to a request for comment.

The job cuts come as PepsiCo is trying to reignite growth at its flagship soda business amid declining demand for sugary drinks. 

Along with its own brand of cola, PepsiCo produces Quaker Oats, Lays potato chips, and Doritos. PepsiCo employed over 309,000 employees as of December 25 of last year, including about 129,000 people in the United States.

Despite rising prices that have hurt many households, there has been a solid demand for the food and drinks found at grocery stores. In order to offset rising expenses for goods, transportation, and labor, PepsiCo and other food firms have raised their pricing.

PepsiCo executives stated in October that they were cutting expenses to counteract the pressure on profit margins and to weather what seemed to be deteriorating macroeconomic conditions after reporting an increase in quarterly sales and profits.

Despite an unclear economic forecast, the overall U.S. labor market is still historically tight, with companies bidding up wages to attract workers from a small pool.

PepsiCo has been reducing its white-collar workforce while retaining its front-line employees, joining other businesses like Walmart Inc. and Ford Motor Co. in this trend. Meanwhile, a slowdown in advertising has forced some internet and media organizations into a hiring freeze.