- PepsiCo has kicked off a round of layoffs affecting employees in multiple offices, two people laid by the company told Business Insider.
- The company announced quarterly revenue on purchases last week that it expects to incur NOK 2.5 billion in restructuring costs through 2023, with 70% of the costs related to departure and other employee costs.
- About $ 800 million of $ 2.5 billion is expected to impact 2019 results.
- PepsiCo has also recently announced plans to restructure the organization and "relentlessly" invest in automation.
PepsiCo has kicked off a round of layoffs as it begins a four-year restructuring plan that is expected to cost the company hundreds of millions of dollars in severance pay.
This week, PepsiCo employees in offices, including Plano, Texas, and the company's headquarters in Purchase, New York, were aware that they were discharged, according to two people directly affected by the dismissals. These two workers were anonymously given the opportunity to speak honestly without risking professional disturbances.
At least some of the workers who have announced redundancies will continue to work at PepsiCo until the end of April, when they train their replacements in the coming weeks, the two workers told Business Insider.
Because of the secrecy surrounding the layoffs, these workers said it was unclear how many teams or individuals had been affected. PepsiCo refused to comment on layoffs.
By PepsiCo's own estimates, the company's redundancies are expected to be a multi-million dollar project in 201
On Friday, PepsiCo announced in an filing with the Securities and Exchange Commission that it is expected to incur $ 2.5 billion in pretax restructuring costs through 2023 , with 70% of costs related to departure and other employee costs. The company also plans to close factories, with an additional 15% linked to construction rods and "related measures."
About $ 800 million of $ 2.5 billion is expected to impact 2019 results, in addition to the $ 138 million included in the 2018 results, the company said in the SEC filing. In February 2018, PepsiCo announced plans to close less than 1% of its over 110,000 corporate employees, including 200 employees at the headquarters in New York.
PepsiCo also announced a commitment to save $ 1 billion annually through 2023. Efficiency and restructuring were major issues in PepsiCo's quarterly revenue entry with investors on Friday.
"Our second set of priorities … means getting better, slimmer, more flexible and less bureaucratic," said Ramon Laguarta, CEO. "So we will cut costs and allow us to pick the savings back into business to develop scales and sharpen core capacities that provide even greater efficiency and efficiency that creates a virtuous cycle."
Being slimmer and smoother seems to be related to cutting work, with CFO Hugh Johnston confirming CNBC that the company is planning to lay off workers in automated positions. Laguarta said on Friday that PepsiCo is "relentless automation and merging the best of our optimized business models with the best new thinking and technology."
Last week, PepsiCo announced that it would reorganize its beverage business into four US regional divisions and a single Canadian division, according to an internal note obtained by the Beverage Digest trade publication. According to Beverage Digest, the note says that the restructuring will "simplify the way we work, remove the loss and push decision making and resources into the market."
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