PepsiCo to cut 3,300 jobs as profit falls nearly 10%
NEW YORK — PepsiCo announced plans on Tuesday to cut 3,300 jobs and close six plants as it deals with lagging U.S. drinks sales and a surging dollar, which will hurt profits from its rapidly growing international business.
The announcement came as the global snacks and drinks maker reported a 9.5 percent drop in third-quarter profit that missed Wall Street expectations. It also offered a downbeat profit outlook.
The job cuts amount to roughly 1.8 percent of Pepsico's global work force of about 185,000 employees. The cuts will affect managerial and factory jobs both in and outside the U.S. Most will be eliminated in the coming months, Chief Financial Officer Richard Goodman said.
The nation's second-largest drink maker — which also owns the Frito-Lay, Tropicana and Quaker brands — said the cuts would generate pretax savings of more than $1.2 billion over the next three years. It plans to save $350 million to $400 million in 2009.
"While we can't control the macro economic situation, we can enhance Pepsico's operating agility to respond to the changing environment," Chief Executive Indra Nooyi said.
In the third quarter, the company had net income of $1.58 billion, or 99 cents a share, compared with $1.74 billion, or $1.06 per share, a year ago. Revenue grew to $11.2 billion in the most recent period from $10.17 billion a year ago.
Excluding one-time costs, the company earned $1.06 per share, but that still fell short of what Wall Street had expected.
Analysts surveyed by Thomson Reuters expected earnings of $1.08 per share on revenue of $11.2 billion.
