US food and drink giant PepsiCo is planning to cut 8,700 jobs in 30 countries as part of plan to save an extra $1.5bn over the next three years.
PepsiCo, which owns nineteen global brands including Gatorade, Tropicana, Pepsi Max, Mountain Dew, Aquafina, Mirinda, Quaker, Lay’s, Walkers and Fritos, reported full-year net revenue had increased fifteen percent to $66.5bn.
In a bid to compete with main rival Coca-Cola, the New York-based company is planning to streamline its operations and save around $1.5bn by cutting its workforce by 8,700, about three percent of its global workforce.
"As we implement our strategic priorities in 2012, we've had to make some tough decisions," said chief financial officer Hugh Johnston. "As a result, 2012 will be a year of transition, one in which we will make the right investments to position PepsiCo properly to achieve long-term high-single-digit… growth."
The $1.5bn in extra savings is in addition to $1.5bn it already planned to save over that period. The world’s second largest food and beverage business, PepsiCo plans to use some of the savings by boosting its advertising and marketing budget by up to $600m.
The job cuts will occur in 30 countries, PepsiCo said, but it is not yet clear if any of these will be in the Middle East or North Africa.
During the fourth quarter of 2011, Pepsi’s revenue in Asia, the Middle East and Africa (AMEA) rose sixteen percent, with double digit snacks volume growth in the Middle East. PepsiCo’s AMEA business contributes accounts for around thirteen percent of its worldwide net revenue.
“The impact on profitability of the volume growth and effective net pricing was offset by higher commodity costs, the impact of civil unrest in certain countries in the Middle East, and by increased marketing support in key countries,” the company said in a statement.
Earlier this month, PepsiCo opened a new $4m, 5,000 sq m warehouse in Jordan. “We are confident that our new warehouse project will help us better serve our customers in line with our vision to maintain our advanced position in the local market and our standing as one of the best companies in the food and beverage industry in the kingdom," said PepsiCo-Jordan's general manager Ahmed El Sheikh said at the time.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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