Consumer staples giant PepsiCo (NASDAQ:PEP) is reducing its workforce at the headquarters of its North American snack food and beverage divisions, joining the growing list of companies that are laying off workers amid macro challenges. The Wall Street Journal first reported the news, citing people familiar with the matter and a staff memo seen by it.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
In the memo, PepsiCo explained that the layoffs aimed to “simplify the organization” to ensure further operational efficiency. Hundreds of jobs are expected to be cut, mainly in the company’s North American beverage business, headquartered in Purchase, New York.
The company’s North American snacks and packaged foods business, which has headquarters in Chicago and Plano, Texas, had recently lowered its headcount through a voluntary retirement program. Last month, rival Coca-Cola (KO) offered voluntary buyouts to its North American workers as part of its restructuring efforts.
PepsiCo has an extensive presence in over 200 countries. At the end of Fiscal 2021 (ended December 25, 2021), the company had 309,000 employees worldwide, including nearly 129,000 in the U.S. Despite macro challenges, PepsiCo reported better-than-anticipated third-quarter results, as higher pricing helped offset the impact of increased input costs and lower volumes in some of its divisions.
Is PepsiCo a Buy or Sell?
Wall Street is cautiously optimistic about PepsiCo stock, with a Moderate Buy consensus rating based on six buys, five Holds, and one Sell. The average PEP stock price target of $178.27 implies a possible downside of 2.7% from current levels.
Shares have advanced 5.4% year-to-date. PepsiCo is trading at a forward Price/Earnings (P/E) multiple of 25.7x, which is 9% higher than the company’s five-year average.
