PepsiCo is the latest addition to the list of companies that have announced layoffs of employees. After Meta and Twitter Pepsico is now on the bandwagon to lay off its workforce. Mind you Pepsico is not a regular brand, many big brands like Lay’s, Gatorade, Pepsi, Mountain Dew, Quaker Oats, and Doritos come under PepsiCo. Many jobs will be terminated, which will eventually affect the company and its position in the stock market
The main reason behind all this chaos is to simplify the company so that work can be done more efficiently and effectively. The layoffs will be heavy for the beverage business. Yet, a looming recession can also be a reason in disguise.
On December 25th, 2021, there were about 309000 employees across the world and 129000 in the US. Despite rising prices that have affected many households hard, demand for food and beverages supplied in supermarkets remains high. According to the research, PepsiCo and other food firms have raised prices to offset rising expenses for ingredients, transportation, and labor.
Despite an unclear economic forecast, the overall labor market in the United States is said to be historically tight, with companies fighting for a limited pool of employees and bidding up salaries.
Companies in the technology and media sectors have been laying off workers in recent months to save costs as the economy remains uncertain. Numerous food and beverage companies have also laid off workers, including Beyond Meat, Impossible Foods, and PepsiCo’s main competitor, Coca-Cola. Coke said in November that it will restructure its North American operations through a voluntary separation program that will include buyouts.
To conclude, growing inflation and a speculated recession fuel labor cost, and thus companies in order to cut costs eventually lay off employees. Big brands like PepsiCo in order to maintain their position in the market taken steps to maintain profit margins and market image. Let’s hope that big brands will step forward and exit the circle of layoffs.