Tech is getting the headlines, but layoffs are actually happening across industries.
The latest victims are at Pepsi, which plans to lay off hundreds across its North American beverage, snacks, and packaged-foods businesses, according to the Wall Street Journal. The company, which owns brands including Lay’s, Tropicana, and Quaker Oats, in addition to its namesake cola business, employs more than 300,000 workers.
The cuts come after Pepsi raised its revenue forecast for the year, which seemed to signal that higher prices—due to inflation—had not stopped people from consuming its products. In its recent earnings report though, the company announced a decline in its operating margin. Pepsi also reported a drop in market share for its carbonated soft drinks.
Hugh Johnston, Pepsi’s CFO, said on a conference call with investors and analysts in October that if margin goals aren’t met, the company will continue to cut costs, “so that if the revenue growth does start to soften up a little bit, we’ll still be in a position to deliver superior financial results.”
Where are the layoffs happening?
The tech layoffs have dominated headlines, in part because many of these companies had gone on hiring sprees during the pandemic. In November, tech giants Meta and Amazon announced they would lay off tens of thousands of workers each.
Reasons for the tech layoffs vary. Meta, which laid off 13% of its workforce, blamed the waning e-commerce boom, the projected revenue hit from the economic downturn, increased competition, and decreasing advertising. DoorDash, which benefited from pandemic-related lockdowns, recently laid off about 7% of its workforce because growth, it said, had tapered.
But as the Pepsi news highlights, these problems are affecting all kinds of industries, including packaged food, retail, and media. Other food businesses including Beyond Meat, Impossible Burger, and Coca-Cola, have also trimmed their workforces. BuzzFeed, an online publication, today announced it would cut 12% of its workforce, blaming in part macroeconomic conditions. And in August, the WSJ reported that Walmart would lay off hundreds of workers. The retail giant said higher prices were pushing consumers to spend less.
Despite the layoffs, the US continues to add jobs, particularly in leisure and hospitality, healthcare, and government. The US unemployment rate in November remained unchanged from the month before at 3.7%