PepsiCo, which owns the branded drinks Gatorade, Frito-Lay and Quaker Oats, is cutting hundreds of jobs across the United States, according to the Wall Street Journal.
The layoffs affect employees at Chicago’s food and beverage companies; Plano, Texas and Purchase, New York, according to testimony from people familiar with the matter and a company memo.
The company’s beverage division is expected to be hit hardest by the cuts, as its snack division has already reduced its workforce through a voluntary retirement program.
Pepsi employs 309,000 people worldwide, more than 40% of whom are based in the United States, according to a regulatory filing by the company.
In October, Pepsi raised its full-year sales guidance after higher prices boosted sales. However, some of its businesses, including Frito-Lay North America, reported lower volumes, a sign that consumers are cutting back on their snacking to better manage their budgets.
Even as it pays more for staples like sugar, corn and potatoes and passes those higher prices on to consumers, the maker of Frito-Lay chips, Mountain Dew soda and Quaker Oats cereal said demand for its products is still there is strong.
However, the uncertain economic environment and persistent inflation have unsettled companies in various industries and prompted them to cut costs.
In recent months, companies in the technology and media sectors have laid off employees to cut costs as economic uncertainty weighs on their businesses. Several food and beverage companies have also cut jobs, including Beyond Meat, Impossible Foods and PepsiCo’s main competitor Coca-Cola.
In November, Coca-Cola announced it would restructure its North American business through a voluntary spin-off program that includes acquisitions.