PepsiCo plans to cut hundreds of corporate jobs: report says

PepsiCo is cutting hundreds of corporate jobs at its North American snacks and beverage divisions, according to a news report – making it the latest in a growing list of big companies to slash their workforces amid fears a recession looms.

The layoffs, which the soda giant has not publicly confirmed, is another sign that companies across different industries are bracing for a tighter economic environment. The Wall Street Journal reported the cuts Tuesday, citing people familiar with the matter and internal documents.

Some of the country’s largest employers in retail and tech, including Walmart, Amazon and Facebook parent Meta, have slashed thousands of white-collar jobs in recent weeks. That’s on top of heavy job reductions in the media world, including CNN and Gannett newspapers. (Amazon founder Jeff Bezos owns The Washington Post.)

Many cuts have occurred at the corporate levels, keeping front-line and customer-facing staff in tact. And though some retailers still hired heavily for the holiday shopping season, they still scaled back, attuned to rising labor costs.

PepsiCo’s cuts signal that more sectors are anticipating difficult financial times, said Tom Essaye, president of Sevens Report Research.

“This is really confirming so many other signs that we are headed toward a potentially pretty significant economic slowdown,” he said.

This comes even as the nation’s job market has remained resilient as the Federal Reserve tightens interest rates in an effort to crush inflation. The U.S. economy added 263,000 jobs in November, according to a Bureau of Labor Statistics report released Friday – a slight drop from October but still above historic norms. The puzzling economic picture has economists split on whether a recession will hit the U.S. sometime next year.

Still, layoffs and hiring slowdowns are still occurring, especially in the tech and media industries, including at Disney, AMC and Cisco. BuzzFeed said in a filing Tuesday that it would cut about 12% of its workforce. Amazon is expected to cut about 10,000 corporate workers, a big turnaround after the e-commerce giant’s years of massive growth. Meta said it would slash 11,000 staff, and Google and others announced hiring slowdowns.

It remains unclear whether the tech and media layoffs represent a harbinger of recession, but the spread to other industries has some analysts and observers increasingly wary.

Large-scale hiring freezes and job cuts among white-collar workers began in earnest this summer, with tech companies hit especially hard. Several experts say that tech companies have arguably hired more than they needed to in the past several years when capital was freely available and the pandemic boosted many big tech firms’ bottom lines.

The tens of thousands of tech workers let go this year may mark the end of a historically strong decade for the industry, and economists say there could be spillover effects into other businesses as the economy show signs of slowing.