Key Notes
- PepsiCo plans about 1,000 North American job cuts to simplify its organization, according to Reuters citing the Wall Street Journal.
- Beverage volumes fell 2% in the region last quarter, while companywide core operating margin narrowed.
- Management has lowered its 2026 core constant-currency EPS growth outlook to 1% to 2%.
PepsiCo (Nasdaq: PEP) is cutting about 1,000 jobs across its North American food and beverage operations, Reuters reported on November 9, citing the Wall Street Journal. The reported reductions follow a weaker earnings outlook and management’s warning that the region’s recovery is taking longer than expected.
The cuts are expected over the next week and aim to simplify the organization, according to a letter from North America chief executive Ram Krishnan reviewed by the Journal. Reuters said PepsiCo had not immediately responded to its request for comment.
PepsiCo’s annual report put its global workforce at approximately 306,000 at the end of 2025, including about 125,000 employees in the United States. The newly reported cuts span its North American food and drinks businesses.
Sales Growth Has Not Ended Margin Pressure
PepsiCo’s October 8 earnings release showed third-quarter revenue of $25.274 billion, up 5.6%, with organic revenue growth of 3.1%. North American beverage volumes nevertheless fell 2%, while food volumes were flat.
The company’s adjusted, or core, operating margin contracted 35 basis points to 16.9%. Core operating profit rose 3%, compared with 19% growth in reported operating profit, which benefited from acquisition-related items and commodity-derivative movements.
For PEP shareholders, the distinction matters: higher reported sales and profit have not removed the pressure on underlying margins. Selling more dollars of product does not necessarily mean more drinks and snacks are moving through the network.
The Profit Outlook Was Already Lowered
Management reduced its full-year core constant-currency earnings-per-share growth forecast to 1% to 2%, from the low end of a 4% to 6% range. It now expects approximately 3% organic revenue growth.
Chief executive Ramon Laguarta said further structural cost reductions would fund growth initiatives and help offset rising input costs. The reported layoffs extend that cost-cutting push, although a specific savings target for these 1,000 positions has not been disclosed in the Reuters account.
Restructuring Costs Were Already Rising
PepsiCo recorded $185 million of charges under its existing productivity plan in the 12 weeks ended September 5, up from $141 million a year earlier, its quarterly filing shows. Severance and other employee costs accounted for $148 million of the latest-quarter total.
Those figures precede the November report and should not be treated as the bill for the newly reported cuts. They show that reshaping the business was already carrying a financial cost.
Payroll savings have two competing demands on them: funding a stronger sales effort and absorbing higher operating costs. A smaller organization will do little for PEP’s profit recovery if those savings disappear into the cost of making and selling the same volume of drinks and snacks.
