PepsiCo is starting its restructuring plan that would take approximately four years with severance pay that is anticipated to cost millions of dollars. According to some PepsiCo workers who were part of the layoffs, employees of the company in offices such as Plano, Texas and New York were given notice on them being laid off soon. There are still a few employees who remain in their offices to train recruits until the end of April. The workers said that the number of laid-off PepsiCo teams or employees is unclear due to the discreteness of the board.
PepsiCo’s layoffs would potentially be a “multimillion-dollar project” this 2019, according to the company’s calculations. About $2.5 billion in restructuring costs is expected until 2023, and about seventy percent of the charges were connected to severance pay and other transaction and related concerns with employees. Additionally, about fifteen percent of expenses were linked to factory closures and other matters.
PepsiCo also announced in a Securities and Exchange Commission filing on Friday that an estimated $800 million of the $2.5 billion would take effect in the results of 2019. About 200 purchase office employees in New York constituted less than one percent layoffs from 110,000 corporate employees during PepsiCo’s lay off announcement last February 2018. In a quarterly earnings call between PepsiCo and investors, the company pledged itself to $1 billion in savings annually until 2023 while emphasizing on “efficiency and restructuring.”
PepsiCo CEO Ramon Laguarta says that the company will be “relentlessly automating and merging the best of our optimized business models with the best new thinking and technologies,” and that “our second priorities involve becoming more capable, leaner, more agile and less bureaucratic.” Chief financial officer Hugh Johnston said that PepsiCo planned to replace its workers in jobs where automation is applicable. PepsiCo’s CEO reinforces the notion, stating that “In doing so, we will drive down cost that enables as to plow the savings back into the business to develop scale and sharpen core capabilities that drive even greater efficiency and effectiveness creating a virtuous cycle.”
Trade publication Beverage Digest obtained an internal memo about the restructuring scheme of PepsiCo and commented that the system would “simplify the way we work, remove red tape and push decision-making and resources into the market.” The company plans to reshape its business into four regional divisions in the U.S. and one division in Canada.
