PepsiCo to cut 8,700 jobs worldwide

[News_Editor]

PepsiCo to cut 8,700 jobs worldwide

2012-02-10 02:41:45 GMT+7 (ICT)

NEW YORK (BNO NEWS) -- PepsiCo on Thursday announced that it will be cutting more than 8,000 jobs worldwide as part of an effort to save some $1.5 billion in costs over the next three years.

The multinational giant said that the reduction of about 8,700 employees across 30 countries, who represent roughly 3 percent of its global workforce, is part of a multi-year productivity program expected to generate $1.5 billion of incremental cost savings by 2014.

While advertising and marketing support behind the company's global brands will be increased by $500 million to $600 million this year, focusing particularly on North America, PepsiCo said that other measures in its productivity program include the optimization of operating practices and further organization structure.

PepsiCo said the decisions are based on a comprehensive review by the Company's management of its portfolio, brands, costs, organization and capital structure. It added that the goal is to deliver top-tier, sustainable long-term growth for its shareholders.

"In a volatile global environment over the past five years, PepsiCo has delivered double-digit compound annual growth in core net revenue, 8 percent compound annual growth in core EPS (earnings per share), and returned about $30 billion to shareholders in the form of dividends and share repurchases," said PepsiCo Chairman and CEO Indra Nooyi.

Nooyi described the year 2012 as a transition year as the company looks to continue on the earnings trajectory over the next 5 to 10 years. Among PepsiCo's key initiatives this year is the implementation of a three-year productivity program that is expected to generate over $500 million in incremental cost savings during each of the next three years, including 2012.

In addition, the company said it expects a decline in core constant currency EPS this year of approximately 5 percent from its fiscal 2011 core EPS of $4.40 due to a combination of strategic and macroeconomic factors, although a high single-digit percentage rate increase is expected as of 2013.

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