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PepsiCo Plans 8,700 Layoffs Despite Rising Revenue

The new cost-cutting model for PepsiCo includes cutting over 8,000 jobs
 PepsiCo Plans 8,700 Layoffs Despite Rising Revenue
 
 

It seems that PepsiCo is doing a little bit of housecleaning. At a press briefing today, CEO Indra Nooyi announced that 2012 is going to be a “transitional year” for the company, and as such PepsiCo will be undergoing some restructuring to cut costs. Part of that restructuring includes cutting 8,700 jobs around the world.

It’s a curious choice, cutting so many jobs at a time when jobs are more valuable than ever. It’s also curious given that, according to reports, PepsiCo’s revenue rose to $20.16 billion, up 11 percent from last year and exceeding analysts’ expectations of $19.89 billion. But Pepsi points to economic uncertainties and the rising costs of staple commodities like corn and aluminum as reasoning for drastic cost-cutting measures, telling the press that “tough decisions” need to be made in the face of such obstacles.

 

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In addition to using those conserved financial resources from job cuts to offset commodity costs, PepsiCo has also announced a plan to push more money into advertising and marketing. The company is hoping to pump as much as $600 million into branding in 2012, with a focus on North America. According to some analysts, investing advertising in a relatively mature market (as opposed to developing markets like China and India) is also an interesting move, especially considering that Coca-Cola is overtaking Pepsi’s beverage division globally.

PepsiCo told the press that it expects to save $1.5 billion by 2014 with this new restructuring plan. Coca-Cola, the company’s biggest rival, also announced cost-cutting plans to save money this week – no plans to cut jobs were announced.

 

[SOURCE: Huffington Post]



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