In a sign that mass layoffs are spreading beyond technology firms, snack and beverage giant PepsiCo is cutting hundreds of corporate employees, according to The Wall Street Journal. The report found that the cuts will mostly affect the company's North American beverage business, as its snacks division was previously trimmed through a voluntary retirement program.
Recent headline-grabbing layoff announcements have mostly been confined to the tech sector, where the combined headwinds of higher interest rates, bearish sentiment on Wall Street, and an uncertain economic climate have helped end a decade-plus of expansion and hiring.
The food and beverage industry has performed well by comparison. Despite rampant supply chain issues and 40-year high inflation, PepsiCo has been able to pass costs onto consumers in the form of higher prices.
Despite raising prices 17 percent from last year, the company in October raised its sales outlook for the coming quarter.
Now PepsiCO is turning inward to cut costs and ease pressure on profits — and it's not alone among its peers. While it may be the first to see a major round of layoffs, other food companies have taken steps to shrink their workforce.
In 2021, General Mills announced plans to cut hundreds of positions amid a companywide restructuring, and more recently, Coca-Cola said it was reducing its workforce through a “voluntary separation program” to streamline its business.
Businesses at the intersection of food and tech have also made cuts. For example, DoorDash last week announced plans to cut 1,250 employees.
Whether or not these layoffs and separations become as severe and widespread as what's facing the tech sector remains to be seen, and overall, the U.S. labor market remains strong. Job openings are historically high, and the unemployment rate of 3.7 percent is still the lowest in at least 50 years.