Global food and beverage giant PepsiCo is planning to eliminate hundreds of jobs in North America, according to an internal corporate memo obtained by The Wall Street Journal.
Most of the layoffs will occur at the corporate level, the report said. The employee memo said the layoffs were intended “to simplify the organization so we can operate more efficiently.”
PepsiCo, which produces Pepsi, Gatorade, Frito-Lay, Quaker Oats and other major brands, is based out of Purchase, N.Y., but has headquarters in Chicago and Plano, Texas. The layoffs will primarily hit the company’s beverage division as its snack business employment was cut through a voluntary retirement program.
In a 2021 company regulatory filing, PepsiCo stated it employed over 300,000 people worldwide, with over one-third of them based in the U.S. The memo did not specify the exact number of employees who would be laid off in the latest move.
In October CNBC reported PepsiCo’s (PEP) third-quarter earnings were higher than expected. Following its quarterly report, PepsiCo’s stock jumped by 4%. PepsiCo reported its overall revenue jumped by 9% from the previous year.
“The consumer is still very healthy in terms of our particular category,” PepsiCo CEO Ramon Laguarta said during a company’s earnings call in October. “Our brands are being stretched to higher price points and the consumers are following us.”
Despite its higher-than-anticipated sales, PepsiCo and other food and beverage companies have been dialing back on staffing as inflation continues to impact consumer choices. PepsiCo rival Coca-Cola (KO) announced last month it will be restructuring its North American business through voluntary separation and employee buyouts, CNBC reported.
Food and beverage companies are just the latest in a string of industries experiencing job cuts. Media and tech industries have laid off thousands of workers over the past few months. Companies like Meta, Lyft, Amazon, and Warner Bros. Discovery have been cutting employees to balance their bottom line.
PepsiCo was recently in the news after an advertisement featuring Lindsey Lohan promoting drinking Pepsi and milk went viral. The concoction, being advertised as “Pilk,” (Pepsi and milk) has apparently been a trend for years, said Pepsi chief marketing officer Todd Kaplan. People who try it and share their experience with the #PilkandCookies hashtag before the end of the year could win a cash prize.