PepsiCo Inc. is eliminating about 1,000 roles in North America, with the maker of Mountain Dew and Doritos saying it's looking to simplify its structure. Ram Krishnan, the company's North America chief executive officer, sent a memo on Monday to workers saying that “too much of how we work today remains complex and fragmented.”
"We have opportunities to simplify our structures, clarify accountability and make decisions faster,” Krishnan wrote. “Over the coming week, we'll make changes across parts of our organisation to address this."
PepsiCo is under pressure to make changes due to weakness in its North America beverage division. It has also struggled to hold onto market share for its salty snacks following price increases and as consumers become more selective in their spending. PepsiCo recently lost its contract with KFC's US restaurants to Coca-Cola Co. PepsiCo employed about 306,000 worldwide at the end of last year, according to a company filing, including about 125,000 in the US.
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Pepsico's Struggle
PepsiCo has struggled with its North America soda business. Organic volume growth for the beverage division, which reported $7.7 billion in overall sales, declined slightly in the third quarter, missing Wall Street expectations.
Chief Executive Officer Ramon Laguarta said on PepsiCo's earnings call last week that the company is “dissatisfied” with the performance of its soft drinks, and that it needs to improve its overall execution. It'll invest more in Poppi, along with Pepsi and Mountain Dew, he added.
Last month, fried-chicken chain KFC reached an agreement to serve Coca-Cola Co. beverages in the US, dislodging PepsiCo Inc. as a longtime restaurant partner. KFC, which has roughly 4,000 US locations, will transition to Coca-Cola beverages starting in January, according to a statement. The restaurants are expected to serve Coca-Cola by spring. International KFC locations will continue to serve PepsiCo drinks.
"This is a big win for Coke. It adds a major customer to Coke's fountain business," beverage consultant John Sicher said Thursday, adding that Coke's fountain business was already much bigger than PepsiCo's. Coke's beverage partners include large chains such as Burger King and McDonald's.
PepsiCo has struggled to turn around its salty snacks division and weakness has also emerged in the company's North America soda business. KFC is also the latest partner the company has lost: In July, Coca-Cola announced a deal with Marriott International Inc. to displace PepsiCo as its beverage provider. Costco Wholesale Corp. last year announced a switch to Coca-Cola from PepsiCo in its food courts.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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