PepsiCo is cutting about 1,000 jobs across North America as it tries to turn around lagging sales in its home market.
The job cuts come after PepsiCo lowered its full-year earnings outlook in October, citing struggles in its home market. In the third quarter, the company's North American beverage unit saw volumes shrink 2%, while its food division reported flat volumes. CFO Steve Schmitt said that while the company has tried to boost sales by cutting prices and investing in marketing, the turnaround is taking longer than expected.
In his letter, Krishnan wrote: “We have a clear ambition for PepsiCo North America: to build a stronger, more future-fit business that delivers industry-leading growth,” he wrote. “To do that, we need to be faster, more connected, and more capable, while continuing to invest in growth – behind our people, capabilities and brands.”
Over the coming week, PepsiCo plans to implement the job cuts. The company employs roughly 306,000 people worldwide, including about 125,000 in the United States, according to a company filing. The Wall Street Journal first reported the coming layoffs.
PepsiCo shares edged higher in afternoon trading. The stock has declined nearly 1% this year, trailing the S&P 500's gain of almost 11% over the same period.
Analysis
Why This Matters
- The layoffs highlight the difficulties facing one of the world's largest food and beverage companies in its home market, which could signal broader industry headwinds.
- Approximately 1,000 workers in North America will be affected, with potential consequences for local economies and company morale.
- Investors are closely watching PepsiCo's turnaround strategy; the stock has underperformed the S&P 500, and the company has already reduced its annual earnings forecast.
Background
PepsiCo is a global food and beverage company with a wide portfolio of brands. Its North American business has faced headwinds, leading to a reduced earnings outlook in October 2026. The company reported that in the third quarter, its North American beverage volumes shrank 2% and food volumes were flat. The job cuts are the latest step in its efforts to revive growth.
Key Perspectives
What to Watch
- Upcoming quarterly earnings reports to gauge whether sales volumes and revenue are improving.
- Any additional restructuring measures if the turnaround continues to lag.
- PepsiCo's stock price performance relative to the broader market, as a measure of investor confidence.