PepsiCo to cut hundreds of jobs as economic pain grows, report says

Hiring in the US was unexpectedly robust in November despite efforts to cool the economy

PepsiCo has said that demand for its products remains strong. AFP

PepsiCo is laying off headquarters workers from its North American snack and beverage units, according to The Wall Street Journal, in a sign that corporate reductions are beginning to extend beyond technology and media companies.

The company, based in Purchase, New York, will dismiss hundreds of employees, the paper reported, citing an internal memo. PepsiCo described the layoffs as intended to “simplify” the organisation, the report said.

PepsiCo did not immediately respond to requests for comment. The company’s shares edged up 0.1 per cent in after-hours trading.

Even though it is paying more for commodities such as sugar, corn and potatoes and passing those higher prices on to consumers, the maker of Frito-Lay chips, Mountain Dew soft drinks and Quaker Oats cereals has said that demand for its products remains strong.

US job gains were unexpectedly robust in November despite efforts to cool the economy, while unemployment held steady and wages ticked up, the government reported last week.

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Big US tech companies cutting thousands of jobs in 2022

Twitter has cut more than 3,000 jobs since Elon Musk purchased the social media company, with some of the firings happening in the eye of the public. 'Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day,' Mr Musk tweeted. AFP

A robot retrieves a pallet of items for employees to sort at an Amazon warehouse. The e-commerce company plans to cut about 10,000 jobs and the lay-offs have started, chief executive Andy Jassy said. Bloomberg

Facebook parent Meta is cutting 11,000 jobs, the first major round of layoffs in the social-media company’s history. 'I want to take accountability for these decisions and for how we got here,' said Meta chief Mark Zuckerberg, pictured. AP

Hewlett-Packard expects to cut up to 6,000 jobs by the end of the 2025 fiscal year, or about 12 per cent of its global workforce, as computer sales slide amid consumer budget constraints. AFP

Apple, the iPhone maker, has paused hiring for many jobs outside of research and development, an escalation of its plan to reduce budgets heading into next year. AFP

Digital banking start-up Chime Financial is cutting 12 per cent of its staff, or 160 people. A representative of the company said Chime remains well-capitalised and the move will position it for 'sustained success'. Reuters

Cisco Systems is beginning a restructuring plan that will affect about 5 per cent of employees. The company says it will incur pretax charges of about $600 million for severance, termination and other costs. The employees will be given a chance to move to other jobs within the company, chief financial officer Scott Herren said. AFP

Dapper Labs founder and chief executive Roham Gharegozlou said in a letter to employees that the company had laid off 22 per cent of its staff. He cited macroeconomic conditions and operational challenges stemming from the company’s rapid growth. Dapper Labs created the NBA Top Shot marketplace for nonfungible tokens, a digital asset class that has suffered a steep drop in demand since the cryptocurrency market downturn. Reuters

Intel is cutting jobs and slowing spending on new plants to save $3 billion next year, the chip maker said. The hope is to save as much as $10 billion by 2025. The headcount reduction could be in the thousands. Reuters

Lyft's cost-saving efforts include divesting its vehicle service business. It is eliminating 13 per cent of staff, or about 683 people. The company had already said it would freeze hiring in the US until at least next year. Reuters

Peloton laid off 500 employees globally, or about 12 per cent of the workforce, in October. It was the fourth time this year the company has cut staff. Along with other expense reduction measures, Peloton said the move will help it reach the break-even point on cash flow by the end of the 2023 fiscal year. Reuters

Qualcomm has frozen hiring in response to a faster-than-feared decline in demand for phones, which use its chips. It now expects smartphone shipments to decline in the double-digit per cent range this year, worse than the outlook it gave earlier. Reuters

Salesforce is focusing on margins as demand for its software products slows. The company has cut hundreds of workers from sales teams as it looks to improve profitability. Since 2017, Salesforce had almost tripled its workforce. AP

Payments company Stripe, one of the world’s most valuable start-ups, is cutting more than 1,000 jobs. The 14 per cent staff reduction will return its headcount to about 7,000. Co-founders Patrick, pictured, and John Collison told staff that they needed to trim expenses more broadly to prepare for 'leaner times'. Bloomberg

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The figures provide little relief to officials who have been fighting to bring down decades-high inflation amid concerns that elevated costs could become entrenched.

The world's biggest economy added 263,000 jobs in November, Labour Department data showed, down from a revised 284,000 figure in October.

The unemployment rate remained low at 3.7 per cent.

The US central bank has raised its benchmark interest rate several times this year to ease demand, with higher lending costs making it more expensive to borrow funds to buy cars and homes, or expand businesses.

Average hourly earnings for private sector workers rose 18 cents to $32.82 last month and over the past 12 months wages have grown 5.1 per cent, according to last week's data.

The report also said there were notable job gains in leisure and hospitality, health care as well as in government.

But employment dipped in retail trade, transportation and warehousing.

Noting the rise in wages, US President Joe Biden said that things were "moving in the right direction".