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.




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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