PepsiCo cuts 8,700 jobs
Company says restructuring will save $1.5 billion by 2014.
Food & Beverage
PURCHASE, N.Y.—PepsiCo is cutting 8,700 jobs to offset high commodity, advertising and marketing costs in North America.
The maker of Pepsi soda, Tropicana juice and Doritos chips said the restructuring will save an additional $1.5 billion by 2014—on top of $1.5 billion in cost cutting it previously announced.
The 8,700 cuts make up about three per cent of its workforce.
Snack and soda makers are facing high commodity costs and changing consumer tastes toward healthier snacks and drinks.
Coca-Cola Co. has also announced its own cost-cutting program, although claims its plan would ultimately add jobs.
PepsiCo has been losing ground to Coke, on the soda side at least, because Coca-Cola has more of an overseas presence, particularly in emerging markets. Pepsi’s snack business, however, has been stronger.
The N.Y.-based company plans to increase advertising and marketing by $500 million to $600 million in 2012, with a particular focus on North America. It also plans to increase dividends and share buybacks in 2012 to return cash to shareholders.