Pepsi Layoffs: The Story Behind Job Cuts, Elliott’s Pressure, and PepsiCo’s Big Reset

PepsiCo just pulled a move that shook both Wall Street and the global FMCG universe. The company has kicked off a fresh wave of layoffs as part of a multi-year cost reset, a plan designed to save billions, speed up decision-making, and make a 128-year-old giant feel a little more startup-like.

And no, this isn’t just another corporate “restructuring announcement”. PepsiCo is tearing down layers, rewiring workflows, and putting automation at the centre of how it wants to operate in the future. With over 318,000 employees worldwide, even a small change feels seismic.

Here’s the full story of why the layoffs are happening, where they fit in PepsiCo’s long-term game plan, and what this tells us about the future of Big Food.

Why Is PepsiCo Cutting Jobs Now?

To understand the layoffs, you have to zoom out. Over the last two years, PepsiCo has been juggling two tricky realities:

1. Input costs have been rising across packaging, transport, and key agricultural commodities.
2. Consumers are shifting faster than ever, healthier drinks, functional beverages, premium snacks, and more competition from private labels.

PepsiCo did deliver strong revenue growth through 2023 and 2024, but margins didn’t see much growth. So the leadership team did what many global FMCG giants are doing right now: hit refresh. Internal communications indicate that overlapping corporate roles, complex reporting structures, and slower decision cycles were dragging productivity. 

Pepsico Management already had a multi-year cost-savings plan underway, but 2024–2025 introduced a new wrinkle: activist scrutiny. Elliott Investment Management, known for pushing large corporations into bold restructuring, took a significant stake in PepsiCo.

Elliott is not a passive stakeholder. The firm has a long history of pushing companies toward:

• Sharper cost discipline
• Executive accountability
• Portfolio rationalisation
• Streamlined organisational hierarchies
• Higher free cash flow generation

This playbook has been deployed at companies like AT&T, Salesforce, and Crown Castle, each of which underwent deep structural changes after Elliott entered the picture. While PepsiCo has not publicly detailed discussions, multiple credible reports confirm that Elliott’s involvement added urgency to PepsiCo’s internal transformation roadmap.

PepsiCo’s Billion-Dollar Cost Reset

PepsiCo has already outlined a huge productivity programme in its filings, and the layoffs are just one line item in a much bigger overhaul. The goal is clear: save over $1 billion annually and reinvest those savings in innovation, sustainability, and growth adjacencies.

Here’s how they plan to get there:

• Automation everywhere. PepsiCo has already rolled out robotics to multiple plants. Next up are AI-led forecasting systems, automated warehouses, and digital-first supply chains.
• Lean corporate structure. This is where the job cuts are concentrated. Middle layers are being streamlined to speed up execution.
• A smarter supply chain. Expect fewer SKUs, optimised routes, and network redesigns across markets.
• Portfolio focus. PepsiCo has more than $20 billion brands. The company is doubling down on its strongest performers while trimming the tail.

Pepsi Layoffs: How Many Jobs Are Affected?

PepsiCo hasn’t disclosed exact numbers for this round, but regulatory filings confirm that reductions are concentrated in corporate roles across North America. Previous restructuring cycles eliminated thousands of positions, and analysts believe this wave is similarly meaningful given the size of the savings target.

A Look at Pepsi’s Financial Reality

Despite all the noise, PepsiCo isn’t struggling. Far from it. The company ended FY24 with over $91 billion in net revenue. Brands like Lay’s, Pepsi, Gatorade, Doritos, and Quaker continue to dominate store shelves globally.

The challenge is margin pressure. Rising commodity costs and higher marketing investment have squeezed operating efficiency. PepsiCo’s solution is a future-proof operating model.

PepsiCo Financials at a Glance

Source: Pepsico Earnings Report

PepsiCo’s Outlook: Better margins, Record Productivity

PepsiCo has shared a straightforward financial outlook for 2026. The company expects 2–4% organic revenue growth, with total reported growth reaching 4–6% after acquisition and currency benefits. Its North America snacks arm (PFNA) will drive much of this improvement through sharper pricing, cleaner-ingredient innovation, and a 20% cut in SKUs to boost efficiency.

The Coca-cola rival also plans to deliver record productivity savings through automation and simpler supply-chain structures, supporting at least 100 bps of operating margin expansion through 2027. PepsiCo expects core EPS to grow 5–7% in 2026 and aims to lift free cash flow conversion to 80% in 2026 and 90% in 2027, enabling higher cash returns to shareholders.

The Bottom Line of Pepsico Overhaul

PepsiCo’s layoffs are a part of a sweeping overhaul designed to reshape how the company works, produces, innovates, and competes. If the company executes this transformation well, it could emerge leaner, faster, and more capable of navigating the next decade of disruption in food and beverages.

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