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

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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".