PepsiCo to cut 3,300 jobs as profit falls 10 pct

AP, via SFGate:



PepsiCo to cut 3,300 jobs as profit falls 10 pct
By VINNEE TONG, AP Business Writer

Tuesday, October 14, 2008



New York (AP) -- PepsiCo Inc. is cutting jobs and closing factories to give it some "breathing room" to navigate the volatility that has permeated all corners of the global economy.

The maker of Pepsi-Cola, Doritos and Sun Chips said Tuesday it plans to eliminate 3,300 jobs and shutter six plants in an effort to save $1.2 billion over three years. It plans to use the savings primarily to revive lagging U.S. soft drink sales.

"This will enable our competitiveness and give us breathing room to respond," Chief Executive Indra Nooyi said on a conference call. "It is no news to you the economy is turbulent and there are uncertainties and volatility in every part of the environment."

The announcement came as the global snacks and drinks company reported a 9.5 percent drop in third-quarter profit, missing Wall Street expectations. PepsiCo also issued a downbeat profit outlook for the fourth quarter and full year, saying that the dollar's recent surge against other major currencies will hurt profits from its rapidly growing international business.

The job cuts amount to roughly 1.8 percent of PepsiCo's global work force of about 185,000 employees, and will affect managerial and factory jobs both in and outside the U.S. Most will be eliminated in the coming months, Chief Financial Officer Richard Goodman said. ......(more)

The complete piece is at: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/10/14/financial/f043309D58.DTL

Raise the price on flavored water, see people stop buying flavored water because its no longer deemed to have sufficient value.

Just because Coke is stupid enough to raise prices to near $5 on a 12 pack (full retail), doesnt mean Pepsi should think they are justified in also raising prices.

Wheres the mythical "competition" the conservatives love to brag about?

It seems real competition would have dictated a price war would have been launched by Pepsi for marketshare when Coke first raised prices instead of the collusion to raise prices between both companies that has driven demand down.