PepsiCo to fire hundreds of employees in North America

The food and beverage company, PepsiCo is reportedly planning to hand over pink slips to hundreds of employees at the headquarters in North America in order to simplify the organisation for operating efficiently. The company has more than three lakh employees globally, of this over 1.2 lakh employees are employed in the US. 

According to a report by the Wall Street Journal, the layoffs will be across the company’s North America beverage business, as well as snacks and packaged foods business in New York, Chicago, and Plano, Texas. Moreover, the beverage business will witness the maximum brunt of the layoffs as the food packaging business has already trimmed jobs through voluntary retirement program earlier this year.

Notably, despite soaring prices, PepsiCo, which manufactures cold drinks PepsiCo and Mountain Dew and snacks Doritos chips, Quaker Oats, reported net revenue growth by 8.8% at $21.97 billion in the July to September quarter this year, as against $20.1 billion in the same period last year. During the quarter under review, the company’s North America business witnessed a growth of 4% in its net revenue. The company expects its revenue to grow from 10% to 12% for the full year. 

Following the Q3 results, Ramon Laguarta, chief executive officer of PepsiCo said, "Given our year-to-date performance, we now expect our full-year organic revenue to increase 12% (previously 10%) and core constant currency earnings per share to increase 10% (previously 8%). Our strong results demonstrate that the investments we have made towards becoming an even Faster, even Stronger and even Better company with pep+ at the centre of everything we do are working. We are encouraged by the progress we are making on our strategic agenda, and remain committed to investing in our people, brands, supply chain and go-to-market systems and winning in the marketplace.”

With the layoffs, the beverage manufacturer is likely to join a list of companies beyond the tech and media space such as Walmart, Ford, Netflix and Tesla amongst others that have opted to lay off employees in order to maintain their operating costs amidst soaring inflation. 

Meanwhile, amidst the turbulent macroeconomic trends and rise in interest rates, several big technology companies have announced massive layoffs and hiring freeze. Last month, the social media platform Meta announced that the company will sack 11,000 employees or 13% of its workforce. Elon Musk-owned Twitter has already sacked 50% of its workforce. Amazon will lay off 10,000 employees. In October, software major Microsoft fired as many as 1,000 employees, or 1% of its workforce, in the third round of downsizing. Snap, the parent company of the social media platform Snapchat, sacked 20% of its workforce to restructure its business.