PepsiCo Is Laying Off Hundreds Of Employees. Here's Why

In November, Elon Musk laid off nearly half of Twitter's 7,500 employees shortly after taking over as CEO of the company, The New York Times reports. While those cuts are certainly alarming, Musk isn't the only one issuing massive staff reductions in the tech sector. Upon Amazon's largest cutback in its 28-year history (which dropped about 10,000 employees), Axios data showed a huge uptick in layoffs at other major tech companies that same month, including Meta, Amazon, Netflix, and Google. 

Stanford Graduate School of Business professor Jeffrey Pfeffer chalks up the trend to "copycat" behavior. "The tech industry layoffs are basically an instance of social contagion, in which companies imitate what others are doing," says Pfeffer. "If you look for reasons for why companies do layoffs, the reason is that everybody else is doing it." Unfortunately, layoffs may also be trending in the food and beverage industry.  

In October, Impossible Foods let go of 6% of its staff in the name of "reorganization" and "future growth," says Food Dive. Per the outlet, those layoffs followed similarly sized staff cuts at Beyond Meat and Maple Leaf Foods. This month, soda and snack giant PepsiCo is following suit. 

PepsiCo plans to lay off hundreds of corporate employees at its North American divisions, the Wall Street Journal reports. The cuts will affect white-collar workers in Purchase, New York — where the company's beverage business is based — as well as those at its snacks and packaged-foods headquarters in Chicago and Plano, Texas. Per a company memo shared with the Journal, the layoffs are intended to "simplify the organization so we can operate more efficiently." This is in spite of strong third-quarter results at PepsiCo that saw a revenue increase of nearly 8% year to date, per The Washington Post. 

PepsiCo's beverage division may see more severe cuts than its packaged-foods business, as the snacks unit already issued recent layoffs through a voluntary retirement program. CNBC notes that longtime PepsiCo rival Coca-Cola also announced a major staff reduction in November, which was initiated through a "voluntary separation program that included buyouts." If imitation is a form of flattery, then Coke might be pleased by its competitor's latest move. The same can't be said for its employees.