Following the footsteps of tech behemoths such as Amazon and Meta, PepsiCo the food, snack, and beverage MNC has announced its decision for a massive layoff of its employees.
According to the latest news report released on Monday, the maker of Frito-Lay chips, Mountain Dew soft beverages, and Quaker Oats is laying off hundreds of workers at the headquarters of its North American snacks and beverages divisions.
PepsiCo Planning Massive Layoffs Of Corporate Jobs
As per a company regulatory filing as of December 25th, PepsiCo has 3,09,000 employees across the globe. About 40% of these jobs are in the United States.
The Wall Street Journal reports that the job cuts will hurt the company’s North American beverage business. PepsiCo’s North American beverage business is based in Purchase, New York, and its North America snacks and packaged-foods business has its headquarters in Chicago and Plano, Texas.
PepsiCo spokespersons declined to comment on the latest development. In after-hours trading, the food and beverage major’s shares edged up 0.1%.
The Wall Street Journal saw a memo that PepsiCo sent to its employees. In it, the company said that the layoffs were meant to make the company simpler so that it could run more efficiently. According to the report, its beverages industry will lose more employment and its snacks area has a voluntary retirement programme. PepsiCo joins Walmart Inc. and Ford Motor Co. in cutting jobs while keeping front-line staff.
Even though PepsiCo is spending more money on commodities such as sugar, corn, and potatoes, and has been passing price hikes to its consumers, the company has said that the demand for its products still remains strong. In October, the company raised its full-year revenue and earnings forecast. This move was following the stronger-than-expected third-quarter sales backed by higher prices. PepsiCo management reportedly adopted cost-cutting efforts to combat profit margin pressure and bad macroeconomic conditions.
The US is already facing the threat of a looming slowdown and reduction in the number of jobs generated. As per the latest report released by the U.S. Bureau of Labor Statistics, for the month of November, retail trade employment declined by 30,000, and employment in the transportation and warehousing industry was reduced by 15,000.
Mark Zuckerberg, CEO of Facebook’s parent company Meta, announced layoffs in November. Amazon was the next to follow suit with the global E-commerce major announcing its plans to eliminate 10,000 people from its workforce.
PepsiCo’s layoff shows that tech layoffs have spread to other industries. H&M, a Swedish low-cost apparel business, announced it would lose 1500 jobs. The layoff is part of the company’s plans to achieve cost reduction and boost efficiency.
Even the financial giants are not insulated from massive layoffs. In the latest development, Morgan Stanley, the banking major on Tuesday cut nearly 2% of its employee headcount. As per the quarterly filing, Morgan Stanley has over 81,000 employees worldwide as of September 30th. David Solomon, the CEO of Goldman Sachs has also indicated though they have been hiring aggressively in the last two years, the company is likely to make some cuts citing economic slowdown as the reason.