According to sources familiar with the situation and papers analysed 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.
About hundreds of jobs will be lost. The company’s beverage division in North America, which is based in Purchase, New York, and its snacks and packaged-foods business, which has offices in Chicago and Plano, Texas, are both impacted by the cuts.
The layoffs will be more pronounced in the beverage business because the snacks unit has already reduced positions with a voluntary retirement programme.
In a memo to staff that was seen by the Journal, PepsiCo told employees that the layoffs were intended “to simplify the organisation so we can operate more efficiently.”
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.
PepsiCo raising prices
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 labour, PepsiCo and other food companies 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. labour 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 organisations into a hiring freeze.
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