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Pepsi to cut 8,700 jobs and increase ad spend

13 February 2012
Pepsi to cut 8,700 jobs and increase ad spend

PepsiCo is cutting 8,700 jobs across 30 countries in a bid to save $1.5bn over three years.

It will also add $600m to its global advertising and marketing budget with a particular focus on its North American brands.

The 12 brands PepsiCo will be investing in include Lay’s, Gatorade, Tropicana, Doritos, 7-Up and Pepsi-Cola.

PepsiCo forecasts a 5% fall in earnings over 2012, although its fourth quarter results for 2011 were better than expected with a profit of $1.42bn compared to the previous year’s $1.37bn.

As a result of the cuts and increased marketing, the company hopes to encourage a growth in 2013.

The plan was laid out by PepsiCo chief executive Indra Nooyi in a meeting with investors on 9 February.  She has been criticised for focusing too much on healthier products but insists that the company has not given up this focus despite the planned investment on less healthy brands.

Nooyi has also accepted responsibility for a series of management missteps, such as promising too much to Wall Street and under-investing in certain brands.  “Anytime you make a mistake it's the CEO's responsibility,” says Nooyi. "The buck stops with me."

David Hing, London

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