PepsiCo plans job cuts despite revenue surge
Drinks company plans to cut 8,700 jobs, or about 3 per cent of its workforce.
PepsiCo has posted a net revenue of $20.15bn for the fourth quarter ended 31 December 2011, an increase of 11 per cent, compared to $18.15bn for the same period in 2010.
The rise in net revenue was primarily due to gains across the company's global snacks and beverage businesses and the acquisition of Russia-based Wimm-Bill-Dann.
Full-year reported net revenue increased 15 per cent to $66.5bn.
The food and beverage company reported a net income of $1.4bn for the fourth quarter of 2011, an increase of 3 per cent, compared to $1.36bn for the same period in 2010.
Operating profit for the fourth quarter of 2011 was $2.24bn, compared to $2.23bn for the same period in 2010.
In a statement posted on the company's website PepsiCo chairman and chief executive Indra Nooyi said:
In 2011, we delivered solid top- and bottom-line growth. We continued to stimulate strong consumer demand for our products, and our successful pricing and productivity programs partially offset the impacts of inflation. Importantly, in a year characterized by a challenging macroeconomic environment and political turbulence, we took advantage of gains from strategic adjustments to our portfolio to reinvest in key capabilities and markets.
As part of a plan to increase advertising and marketing spending by $500m-$600m in 2012 for its major brands, mostly in North America, the company plans to cut 8,700 jobs, or about 3 per cent of its workforce.
"Our goal is to continue on that earnings trajectory over the next 5 to 10 years, fully recognizing that we need to make changes in how we operate to address the challenges we identified in the review process. 2012 will be a transition year, in which we will be taking the appropriate steps to build a stronger, more successful company going forward," Nooyi said.