PepsiCo Inc. is preparing to lay off hundreds of employees this week from its North American division. The world’s second-largest food and beverage company is the latest in an increasing number of large companies scaling back amid high inflation rates and the risk of an American recession, per The Washington Post.
The layoffs have not been publicly confirmed by the company yet, but slashing employee numbers is on trend. In recent months, Microsoft, Twitter, HP, AMC, Warner Bros, CNN, Amazon and other big companies have laid off between hundreds and thousands of employees, as reported by the Deseret News.
The Wall Street Journal reported PepsiCo’s layoff plans on Tuesday, citing internal documents that claim PepsiCo staff were told layoffs would disproportionately fall on the beverage business, but other departments would also see cuts.
PepsiCo is the parent company to Lay’s, Quaker, Tropicana, Gatorade and other brands. Layoffs from the beverage and snack brand is a signal that recent employer cutbacks might expand past tech and media layoffs.
According to Neil Saunders, a retail analyst, the PepsiCo layoffs are “ominous.”
“If a company performing well, with earnings and revenue up solidly in recent quarters, is reducing its workforce then it is likely others will be considering similar moves,” Saunders said in a statement, per The Washington Post.
The company’s reported layoffs do not follow a low-performance year. According to the Post, company leaders said PepsiCo had a strong third quarter. Net revenue went up 8.8% during the quarter, and has surged 7.7% since the start of the year.
According to Fortune, PepsiCo’s finance chief Hugh Johnston sees the layoffs as a cushion amid inflation. “If the revenue growth does start to soften up a little bit, we’ll still be in a position to deliver superior financial results,” Johnston said.