Up until now, the majority of layoffs have been focused in technology firms and banks, as talking heads proclaim 'the consumer is still strong'.
However, tonight's news that no lesser staple than PepsiCo is to announce a major belt-tightening suggests the pain is spreading much more broadly across the US economy.
The Wall Street Journal reports, according to people familiar with the matter and documents reviewed, that the giant firm will be cutting hundreds of jobs at its North American snack and beverage headquarters.
As of Dec. 25 last year, PepsiCo employed about 309,000 people worldwide, including about 129,000 people in the U.S.
In a memo sent to staff that was viewed by the Journal, PepsiCo told employees that the layoffs were intended “to simplify the organization so we can operate more efficiently.”
Of course, it's anyone's guess when these layoffs appear in the official jobs data...
the BLS will need a +10 million birth death adjustment soon to keep their BS going https://t.co/WZZ8WIsKzi— zerohedge (@zerohedge) December 5, 2022
This decision comes just a few week after the company announced it had raised prices on its snacks and drinks by 17% on average from last year.
“The consumer has very much stuck with our products,” said Hugh Johnston, PepsiCo’s finance chief, in an interview.
“In a world where there are many struggles and stresses, we are kind of an affordable luxury.”
“There may be a point when the revenue growth slows down,” Mr. Johnston said. He added: “We just have to be prepared for it.”
Do the layoffs mean that the consumer is cutting back further? Or have margins been crushed even more by inflation?
Are Doritos now out of reach for the average joe?