Around half way through an otherwise positive statement about investment from PepsiCo, released simultaneously with its Q4 and full year results, was a line which said: ‘This effort includes headcount reductions of about 8,700 employees across 30 countries, about 3% of the company’s global workforce.’
On the one hand, global beverage and snack manufacturers are operating with steadily increasing commodity costs. On the other, they are having to adapt to changing consumer tastes towards healthier food and drink. Coca-Cola also announced a cost-cutting plan this week, but said that the plan would eventually add jobs.
Depending how you read the numbers, PepsiCo has lost ground to Coca-Cola in its beverage businesses, mainly due to Coke’s stronger international presence, particularly in the emerging markets. On the other hand Pepsi also has snacks which are become stronger.
In its statement, Pepsi said that ‘tough decisions were needed’, because it predicts 2012 will be another year with higher than average commodity costs. And it doesn’t really have the option to offset those costs by raising prices in the face of increasing caution from consumers in an uncertain economy…
Surely made the more uncertain when companies announce jobs losses in their thousands.
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