PepsiCo is preparing for one of its most sweeping overhauls in years, with plans for layoffs, portfolio reductions and structural changes across its US
operations. Reports from Bloomberg and Reuters indicate that the restructuring follows weeks of strategy discussions with activist investor Elliott Investment Management, which has been pushing the food-and-beverage giant to streamline its sprawling business. The company is expected to cut nearly 20 per cent of its US product range while increasing automation, trimming costs and sharpening its market focus. The move is aimed at improving performance and closing the gap with rival Coca-Cola, which has outpaced PepsiCo over the past five years as consumers lean toward healthier options and smaller package sizes. Layoffs Expected According to Bloomberg, employees in multiple North American locations, including Purchase (New York), Chicago and Plano (Texas), were directed to work remotely this week. Such directives often precede major job-cut announcements.“We will be making structural changes to our business that will affect some roles in the company,” Jennifer Wells, chief people officer in North America, reportedly told staff. The reset is expected to include shuttering select manufacturing lines and focusing more aggressively on affordability. This marks an early concession to Elliott, which has argued that PepsiCo’s portfolio had grown too complex and required simplification. PepsiCo had already begun its belt-tightening earlier this year. In November, it announced the closure of Frito-Lay facilities in Orlando, Florida, affecting more than 450 workers, calling the move “driven by business needs,” Bloomberg reported. Elliott Relationship Shapes PepsiCo’s Strategy Elliott, which revealed a $4 billion stake in the company in September, has urged PepsiCo to re-evaluate its bottling operations and consider divesting certain non-core food brands. Despite this, the firm will not receive board representation, and Reuters reports that a proxy battle is not expected. “We are confident that PepsiCo will create substantial value for shareholders as it executes on this plan, and we look forward to continued engagement with the Company,” said Marc Steinberg, partner at Elliott. PepsiCo says its restructuring blueprint includes “ensuring affordable price tiers and simpler ingredients,” in addition to deploying automation and digitisation. The company aims for “at least 100 basis points of core operating margin expansion in aggregate over the next three fiscal years,” and plans to update its North America supply-chain review in late 2026. CEO Ramon Laguarta previously described earlier conversations with Elliott as “collaborative,” though he stopped short of endorsing the activist’s push to spin off the North American bottling business. PepsiCo continues to prioritise pricing discipline and portfolio focus to navigate a rapidly shifting consumer environment. The company expects organic revenue to grow between 2 per cent and 4 per cent in fiscal 2026, in line with but slightly above analysts’ forecasts of around 2.7 per cent.
