PepsiCo to lay off hundreds of workers at headquarters ‘to simplify organisation’

Pepsi maker PepsiCo will lay off hundreds of workers at the headquarters of its North American snacks and beverages verticals. These layoffs will affect the company’s North American beverage business based in Purchase, New York, and, the North American snacks and packaged-foods business has headquarters in Chicago and Texas respectively.

The food and beverages bellwether said in a memo to employees accessed by The Wall Street Journal stated these layoffs look “to simplify the organization so we can operate more efficiently.” More job cuts will take place in the beverages business compared to the snacks vertical. This is because the snacks vertical has trimmed positions with a voluntary retirement program, as per the WSJ.

PepsiCo makes Doritos nachos, Lays potato chips, and Quaker Oats apart from its namesake cold drink. The food and beverages giant employed around 309,000 people worldwide, including around 129,000 people in the US.

PepsiCo and other food and beverage companies are hiking prices to mitigate higher costs of raw materials (corn, sugar, and potatoes), transport, and labour. Despite the rise in prices, demand for food and beverages has been strong in grocery stores.

In October, PepsiCo raised its full-year revenue and earnings forecast after better-than-expected third-quarter sales due to high prices. PepsiCo CFO Hugh Johnston said at a conference call with investors, “We are carefully watching what happens with the consumer. We obviously exited the third quarter with the consumer still very healthy in terms of our particular categories.”

He added, “I’m not sure that’s true broadly with housing and other big-ticket purchases.”

With this, PepsiCo joins companies such as e-commerce behemoth Amazon, Facebook-parent Meta, food delivery firm DoorDash, cable TV network AMC Networks, banking giant Citigroup, media giant CNN, cryptocurrency exchange Kraken, Morgan Stanley, chipmaker Intel, software giant Microsoft and Elon Musk-led microblogging platform Twitter.

US-based companies, from tech majors to food delivery firms to banks, are engaging in job cuts and wage cuts as corporate America is bracing for a potential economic downturn and persistent inflation.

(With agency inputs)

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