According to reports from Reuters, PepsiCo is implementing its announced job cuts as part of a streamlining initiative. The layoffs are expected to be completed over the next week as the company works to simplify its structure. Ram Krishnan, head of PepsiCo North America, announced the cuts in a staff letter on Monday, framing them as a way to move faster, execute better, and invest behind opportunities that will drive growth. The cuts represent less than 1% of the company's roughly 125,000 US employees, with the company employing about 306,000 people worldwide as of December 27, 2025.
As reported by The Wall Street Journal, PepsiCo lowered its 2026 profit forecast after another weak quarter in North America, particularly in beverages. In February, the company cut prices by up to 15% on brands such as Lay's and Doritos. Third-quarter North American beverage volume still fell 2%, while food volume remained flat. Chief Financial Officer Steve Schmitt said in October that the recovery was taking longer than planned. The company cut its 2026 adjusted earnings per share (EPS) growth forecast to 1% to 2%, down from its earlier target of the low end of 4% to 6%. The job cuts come as the company works to reignite growth in North America amid sluggish soda sales, weaker demand for higher-priced snacks and elevated input costs.
According to Reuters, PepsiCo shares were up about 1% in late-afternoon trading on Monday following the job cut announcement. As reported by The Wall Street Journal, PepsiCo shares rallied over the month following the job cut announcement. Down almost 12% for 2026 in early October, they closed November 9 at $141.88, representing a 12.63% gain from about $125.97 a month earlier. The stock also yields 4.17%, which was part of why it became Jim Cramer's PepsiCo pick in August alongside falling oil prices. The recovery comes after the company's stock was down nearly 12% for 2026 in early October.
As reported by The Wall Street Journal, core operating margin fell to 16.9% in the third quarter, down from 17.3% a year earlier. This decline came after activist investor Elliott Investment Management bought a roughly $4 billion stake in PepsiCo a year ago. After talks with Elliott, management promised at least 100 basis points of core operating margin growth over three years. In October, the company promised deeper cost cuts to make up for weak demand, with investors not waiting for the results to improve.
