Closings, Layoffs Loom at PepsiCo

By Pan Demetrakakes, Senior Editor

Feb 22, 2019

PepsiCo is planning to close plants and pare jobs, keeping up with production through “relentless” automation, according to a securities filing and news reports.

The company plans to spend $2.5 billion in restructuring costs, according to a filing with the Securities and Exchange Commission. About 70% of that will be spent on severances and other employee-related costs, and another 15% on costs related to plant closings.

Two people who were notified of their impending layoffs told Business Insider that other employees throughout the company, including in corporate headquarters in Purchase, N.Y. and Frito-Lay headquarters in Plano, Texas, are already being laid off. In some cases, they are being required, as a condition of receiving their severances, to stay on until late April to train their replacements.

Unions representing PepsiCo workers are preparing to confront a strong push to consolidate plants and replace jobs through automation. The International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF) said in a statement that “our members will demand that any deployment of new technologies and automation will have to be a key issue for collective bargaining.”

The restructuring is a major initiative for Ramon Laguarta, who became PepsiCo’s CEO in October. Laguarta said that PepsiCo is “relentlessly automating and merging the best of our optimized business models with the best new thinking and technologies.”