PepsiCo reported a tough third quarter Tuesday and announced plans to save the company a projected $1.2 billion over three years by eliminating 3,300 jobs.
The cuts amount to a little less than two percent of PepsiCo’s global workforce and will, according to a press release, come across all segments of the business – with 40 percent relating to the closure of six plants. Which six plants, the release said, will be announced by the end of the year.
The cuts will affect both U.S. and international positions, though PepsiCo did not respond to questions about what portion would fall in the U.S., or how many jobs would be cut from PepsiCo’s snack-food subsidiary, Frito-Lay.
These plans follow Pepsi’s announcement last week that it will significantly redesign and rebrand some of its core carbonated soft drinks, which have been in decline. Chief Executive Officer Indra Nooyi said she thought the initiatives would stop the decline in good economic times, but expects them to slow the slide in today’s economic turmoil.
In Tuesday’s earnings report, Pepsi again cited a shaky economy and the falling value of the dollar as contributors to the company’s financial woes. UBS Analyst Kaumil Gajrawala noted that the economic environment mostly affected Pepsi’s beverage business, and projected that Coca-Cola would likely also suffer. Deutsche Bank Analyst Marc Greenberg said, despite the bad news, the cuts reflect well on the ability of Pepsi Brass to eliminate costs amid a difficult economic environment.