PepsiCo, Inc. has confirmed the upcoming job cut and closure of multiple U.S. facilities as part of a strategy to streamline operations amid recent financial challenges.
This decision will result in the layoff of nearly 400 employees across four closing locations scheduled for late December, affecting PepsiCo facilities in Chicago, Illinois; Cincinnati, Ohio; Harrisburg, Pennsylvania; and an additional bottling plant in Atlanta, Georgia.
The company has issued official Workers Adjustment and Retraining Notification Act (WARN) notices to state and local authorities, detailing the impacts.
The Chicago location, scheduled for permanent closure on Dec. 28, will let go 131 employees. It is the only complete shutdown among the four affected sites.
In Cincinnati, 136 will be laid off, among whom 104 are represented by Teamsters Local 1199. The company has engaged in bargaining with union representatives to discuss options for the affected employees, including potential internal transfers and reassignments.
The plant in Atlanta will see fewer than 50 layoffs. PepsiCo has not specified the precise nature of changes at this location, but operations are anticipated to be scaled back rather than fully discontinued.
PepsiCo’s sales, delivery, and warehousing functions are expected to continue at the Harrisburg, Cincinnati, and Atlanta locations.
Affected employees will receive 60 days of pay and benefits, as mandated under the WARN Act, although they may not be required to work during this notice period.
PepsiCo also plans to provide assistance to help transition employees into new roles, either within the company or externally. In Ohio, PepsiCo has committed to supporting displaced workers by providing information on job opportunities at nearby facilities.
PepsiCo has been struggling with financial challenges recently.
This follows years of consistent price increases, which may have contributed to recent consumer pullback in major markets, including the United States and China, the company said in an investor report released early this month.
PepsiCo’s North American financial outlook has been impacted not only by decreasing sales volume but also by increased operational costs due to inflation and rising commodity prices.
The company has acknowledged these pressures, with a spokesperson noting that the closures align with PepsiCo’s broader goals of enhancing operational efficiency.
The company’s CEO Ramon Laguarta said strategic adjustments are needed to maintain profitability, especially in a high-cost environment. The company also outlined its continued focus on productivity gains and cost management as it navigates these financial hurdles.
The decision to reduce its physical footprint appears to be a proactive measure designed to streamline supply chains and potentially mitigate financial losses in its beverage segment.
