PepsiCo Prepares Layoffs as Talks With Activist Investor Elliott Near End

On December 8, PepsiCo announced a number of operational adjustments, including a review of its supply chain and a reduction in the total number of goods it offers. These changes were supported by activist investor Elliott Investment Management. According to an internal memo, the corporation is also considering layoffs in North America.

In a statement, CEO Ramon Laguarta claimed the actions, which include cutting off over 20% of its US product line, will boost core operating margin, record efficiency savings, and organic revenue growth beginning in 2026. The strategy, which includes making investments in more reasonably priced goods, will increase revenue and profit growth, according to Elliott partner Marc Steinberg.

PepsiCo Focusing on Organic Revenue Growth

In contrast to the average analyst forecast of roughly 2.7%, PepsiCo stated that it anticipates organic sales growth in fiscal 2026 to be 2 to 4%, excluding factors like acquisitions and currency volatility. Separately, PepsiCo told staff members to work remotely this week in many North American locations, including its headquarters in Purchase, New York, as well as Chicago and Plano, Texas.

In recent years, employers have often asked employees to work from home in advance of layoffs. Bloomberg News saw a communication sent to employees on December 7th by Chief People Officer Jennifer Wells. The message makes it quite evident that PepsiCo will be changing its business structure, which will have an impact on certain positions within the organisation.

Elliott Pushing for these Changes

Elliott has pushed for improvements, pointing to a decreasing share of the beverage market and an excessively complicated portfolio of brands. In September, Elliott unveiled a roughly US$4 billion stake in PepsiCo. According to Laguarta of PepsiCo, the corporation is updating its manufacturing system, cutting costs, and increasing efficiency in order to make investments in other areas of the business.

Before Elliott joined the company, PepsiCo executives had already discussed right-sizing the workforce, a common corporate synonym for layoffs. More than 450 people were laid off when PepsiCo closed two Frito-Lay plants in Orlando, Florida, in November. The corporation claimed at the time that business reasons were the reason for the layoffs.