PepsiCo to cut 1,000 jobs as North America struggles

PepsiCo is cutting about 1,000 jobs across North America as the snack and beverage giant tries to turn around lagging sales in its home market, CNBC reported.

The layoffs were announced in a Monday letter to employees from Ram Krishnan, CEO of PepsiCo North America. The company employs roughly 306,000 people worldwide, including about 125,000 in the United States, meaning the cuts affect less than 1% of the workforce.

The move follows a disappointing third quarter in which North American beverage volume shrank 2% and food volume was flat. PepsiCo cut its full-year earnings outlook in October, and Chief Financial Officer Steve Schmitt said the turnaround is taking longer than expected.

The North America problem

PepsiCo’s North American business has been under pressure for more than a year. Consumers have traded down to private-label snacks and cheaper beverages as inflation has persisted. The company tried cutting prices and increasing marketing spend, but the volume numbers did not respond.

The beverage side is losing share to Coca-Cola, which has invested heavily in zero-sugar variants and premium offerings. Pepsi’s traditional cola business is in long-term decline as consumers shift away from sugary sodas. The company’s portfolio of non-carbonated drinks, including Gatorade and Tropicana, has also struggled with volume.

The food side, anchored by Frito-Lay, has held up better but is not growing. Snack consumption rose during the pandemic but has since normalized. Private-label chips and store-brand snacks have taken share from branded products as price-sensitive consumers look for savings.

Krishnan’s letter framed the cuts as part of a broader effort to build “a stronger, more future-fit business that delivers industry-leading growth.” He said the company needs to be “faster, more connected, and more capable.” The language is corporate restructuring talk, but the underlying problem is simple: PepsiCo’s North American business is not growing, and the company is reducing costs to protect earnings.

The Poppi connection

The layoffs come at a awkward moment for PepsiCo’s beverage portfolio. The company bought Poppi, the prebiotic soda brand, for a reported $1.8 billion in 2025, but the integration has underperformed. Poppi’s sales are tracking around $12 million against projections of $300 million, according to industry reports.

The Poppi acquisition was supposed to give PepsiCo a foothold in the better-for-you beverage category, where consumers are willing to pay a premium for functional drinks. Instead, the brand has lost momentum under PepsiCo’s ownership, and the founders have moved on to launch a new hydration brand called Jetty.

The failure to integrate Poppi raises questions about PepsiCo’s ability to manage brands that were built on social media and direct-to-consumer distribution. The corporate parent’s processes may be diluting the agility that made these brands successful in the first place.

Industry context

PepsiCo is not alone in cutting jobs. The consumer packaged goods industry has been under pressure from two directions: inflation has squeezed margins, and consumers have traded down to cheaper alternatives. Companies that grew during the pandemic are now contracting to match the lower demand.

Boeing announced layoffs in its commercial airplane division. The children’s clothing retailer Children’s Place filed for chapter 11. The pattern is consistent: companies that expanded during the cheap-money era are now adjusting to a world of higher rates and tighter consumer budgets.

PepsiCo’s stock is down nearly 1% this year, lagging the S&P 500’s gain of about 11%. The market has judged the company as one that is struggling to grow in a difficult environment, and the layoffs are a recognition that the previous strategy was not working.

What I think

The 1,000 job cuts are small relative to PepsiCo’s 125,000 U.S. workforce, but they signal something larger. The company tried price cuts and marketing, and neither worked. When a company moves to layoffs, it means the revenue problem is structural, not cyclical, and the cost base has to shrink to match.

The North American beverage business is the core issue. Pepsi is losing the cola war to Coca-Cola, and the non-carbonated portfolio is not picking up the slack. Gatorade faces new competition from hydration brands targeting GLP-1 patients, and Tropicana has been losing share to premium juices and functional drinks for years. The beverage portfolio needs a reset, and the layoffs are part of it.

The Poppi failure is the warning sign. PepsiCo paid $1.8 billion for a brand that is now generating $12 million in revenue. Either the acquisition was a mistake, or the integration destroyed the brand’s momentum. Either way, the result suggests that PepsiCo’s strategy of buying growth through acquisitions is not working, and the company needs to build brands rather than buy them.

The food and beverage industry is going through a period where the companies that grew in the 2010s are struggling to adapt to the 2020s. Inflation, trade-down behavior, and changing consumer preferences are punishing the incumbents. PepsiCo has the balance sheet to survive the transition, but the question is whether it can grow again, or whether it is managing a slow decline.

The stock market’s verdict is clear. A 1% decline in a year when the S&P 500 is up 11% is a significant underperformance. Investors are pricing PepsiCo as a company that is not winning, and the layoffs confirm that the company agrees. The 1,000 jobs are not a catastrophic number, but they are a signal. The company that was supposed to grow through acquisitions and brand investment is now cutting people to protect margins. The next test is whether Krishnan’s restructuring can restart growth, or whether PepsiCo is managing a slow decline in a category that has moved on.