PepsiCo Inc. is all set to lay off workers at the headquarters of its North American snacks and beverages divisions reportedly.
Hundreds Of Employees Affected
The move is considered to be a signal that corporate belt-tightening is extending beyond tech and media, according to sources.
It is going to affect hundreds of jobs that it will be eliminating, said the people known of the development.
Moreover, these job cuts will be affecting the company’s North America beverage business, which is based in Purchase, N.Y.
Also affecting its North America snacks and packaged-foods business, which has headquarters in Chicago and Plano, Texas, the sources said.
Why Would This Happen?
PepsiCo told its employees that the layoffs were intended “to simplify the organization so we can operate more efficiently,” in a memo sent to the staff.
Moreover, these layoffs will be heavier in the beverage business as prior to this, the snacks unit has trimmed positions with a voluntary retirement program.
Apart from cola, PepsiCo also makes Doritos, Lays potato chips and Quaker Oats.
PepsiCo employed about 309,000 people worldwide, which includes about 129,000 people in the U.S. as of Dec. 25 last year.
Strong Demand For Food And Beverages
Despite the rising prices that have pinched many households the demand for food and beverages sold in grocery stores has been strong.
On the other hand, PepsiCo and other food companies have been raising prices in order to offset higher costs for ingredients, transport and labor.
During October, the PepsiCo executives reported a jump in quarterly sales and profits.
They said that they were cutting costs to offset the pressure on profit margins and to weather what appeared to be worsening macroeconomic conditions.
In the meantime, the entire U.S. labor market remains historically tight.
The employers found to be competing for a limited pool of labor and bidding up wages despite an uncertain economic outlook.
With this move, PepsiCo joins other companies such as Walmart Inc. and Ford Motor Co., that have been trimming white-collar workers even as they hold on to front-line staff.
While all this is happening, an advertising slowdown has pushed many tech and media companies into layoff mode.
