PepsiCo to cut 3,300 jobs globally as profit fallsOctober 14th, 2008 - 10:31 pm ICT by IANS
New York, Oct 14 (IANS) Reporting a 9.5 percent drop in the third-quarter profit and a downbeat profit outlook for the next quarter, PepsiCo has announced plans to cut 3,300 jobs globally.India-born Indra Nooyi-led PepsiCo, the nation’s second-largest drink maker after Coke, has struggled with lagging sales of its soft drinks business in the US.
PepsiCo said Tuesday it expects to generate a pretax savings of more than $1.2 billion over the next three years with $350 million to $400 million to be saved in 2009. A chunk of the job cuts will be related to the closing of six plants.
The majority of the savings will be invested in brand building, long-term research and development and growth initiatives in key markets, the company said.
Nooyi, PepsiCo’s chairman and chief executive, said in a statement: “While we can’t control the macro-economic situation, we can enhance PepsiCo’s operating agility to respond to the changing environment.”
The company had net income of $1.58 billion, or 99 cents a share, in the quarter, down from $1.74 billion, or $1.06 per share, a year earlier, on sales of $11.2 billion in the most recent period, compared with $10.17 billion a year ago.
PepsiCo also noted that the recent surge in the US dollar will hurt fourth-quarter profit. At current rates, the incremental impact would be about 4 cents to 5 cents per share.