• PepsiCo (NASDAQ:PEP) is cutting roughly 1,000 jobs across North America, according to a Wall Street Journal report, as its domestic turnaround takes longer than expected.
  • The move follows a Q3 earnings forecast cut and a broader restructuring plan tied to a December 2025 agreement with activist investor Elliott Investment Management.
  • PepsiCo has not confirmed the exact headcount, but recent cost actions include closing a Tennessee bottling plant affecting 112 workers and reducing product variants.

Restructuring Hits Snag

PepsiCo is eliminating approximately 1,000 corporate and supply-chain positions in North America, according to people familiar with the matter, as the snack-and-beverage giant intensifies cost-cutting amid a slower-than-anticipated recovery in its home market. The Wall Street Journal first reported the layoffs, which affect roles across the company’s U.S. and Canadian operations, though the exact number could not be independently verified.

The move comes just weeks after PepsiCo trimmed its full-year earnings-growth forecast, citing persistent weakness in North American profitability. On October 8, the company reported stronger third-quarter sales and profit but said core EPS growth for 2026 would be only 2.5% to 3.5%, down from a prior outlook at the low end of 5% to 7%. North American beverage volumes fell 2%, while food volumes were flat.

“We are taking additional structural cost actions to fund innovation and marketing and to offset rising input costs,” Chief Financial Officer Steve Schmitt said on the earnings call, according to prepared remarks. A PepsiCo spokesperson did not immediately respond to a request for comment on the job cuts.

The restructuring extends beyond headcount reductions. PepsiCo has already committed to slashing nearly 20% of its U.S. product variants, automating warehouse and distribution processes, and reviewing its North American supply chain. In October, the company closed a bottling plant in Knoxville, Tennessee, affecting 112 manufacturing, maintenance and warehouse employees. Those workers will receive pay through January 1, 2027, and assistance finding other roles within PepsiCo, according to a company statement.

Elliott’s Shadow Looms Large

The job cuts are the latest step in a turnaround plan forged under pressure from activist investor Elliott Investment Management, which disclosed a roughly $4 billion stake in December 2025. That agreement pushed PepsiCo to simplify its U.S. product assortment, improve affordability, accelerate productivity initiatives and review its supply chain. Elliott partner Marc Steinberg endorsed the plan at the time, saying it would “position PepsiCo for sustainable growth.”

But the path has proven bumpier than expected. North American foods’ core operating margin declined 280 basis points in the third quarter, reflecting investments in lower-priced products, higher marketing spending and a tough comparison with a prior-year asset-sale gain. Management has warned that the domestic recovery is taking longer than planned.

The layoffs also echo a previous round of cuts: in December 2022, PepsiCo eliminated hundreds of North American headquarters roles. That episode should not be conflated with the current restructuring, which is broader in scope and tied to the Elliott agreement.

What’s at Stake

For investors, the trade-off is familiar: expense reductions can support margins, but overly deep cuts risk weakening execution and innovation. PepsiCo’s shares have lagged the broader market this year, though they rose modestly in premarket trading following the Journal report, suggesting investors see the cost actions as necessary.

The company employed about 306,000 people worldwide at the end of 2025, including roughly 125,000 in the United States. The latest cuts represent less than 1% of the global workforce but are concentrated in North America, where profitability has been under pressure.

PepsiCo is also navigating a shifting consumer landscape. Functional and zero-sugar beverages are outpacing traditional soda, while food-ingredient policy is pushing companies to reformulate products. PepsiCo has committed to removing synthetic dyes from its Cheetos and Doritos lines, among other changes, as the FDA tracks voluntary industry efforts to phase out petroleum-based colorings.

Tariffs remain a wildcard. The company booked $178 million in tariff refunds in the third quarter, illustrating how trade policy can swing earnings. But management has not cited tariffs as a direct cause of the layoffs.

For now, the focus is on execution. PepsiCo’s December 2025 plan targeted at least 100 basis points of core operating-margin expansion over the following three fiscal years—an objective, not a guarantee. The company has said it expects to complete its supply-chain review by late 2026.

Correction: An earlier version of this article misstated the timing of the Knoxville plant closure. It occurred in October 2026, not October 2025.