PepsiCo to Cut Jobs, Drop Product Lines to Appease Activist Investor Elliott

PepsiCo on Monday announced plans to reduce its product line-up in the US by 20% by early next year and introduce more affordable price tiers, aiming to “accelerate” revenue growth and improve operating margins. The move is part of a wider agreement with activist investor Elliott Investment Management.

Elliott has built a roughly 2% stake in the Lay’s and Doritos maker, valued at about $4 billion. In early September, the firm wrote to PepsiCo’s board urging operational improvements and more strategic reinvestment.

PepsiCo also issued fresh guidance for the year ahead, forecasting organic revenue growth of 2% to 4% in fiscal 2026, compared with analysts’ average expectation of around 2.7%. Organic revenue excludes factors such as acquisitions and currency movements, making it a key metric for investors.

Meanwhile, a Bloomberg report said PepsiCo had asked staff in several North American offices, including its Purchase, New York, headquarters, as well as sites in Chicago and Plano, Texas, to work from home this week. Many companies issue similar remote-working directives ahead of planned job cuts.

In a note to employees, Jennifer Wells, chief people officer for North America, reportedly said the company would be implementing “structural changes” affecting certain roles.

Chief executive Ramon Laguarta has said PepsiCo is focused on cutting costs, improving efficiency and modernising its manufacturing operations to free up funds for future investments. Executives had already discussed the need to “right-size” the workforce before Elliott took an interest.

In November, PepsiCo announced it would close its Frito-Lay facilities in Orlando, Florida, leading to more than 450 job losses. At the time, the company said the decision was based on operational requirements.

PepsiCo has not disclosed which product lines will be discontinued. Elliott has urged the company to streamline its beverage portfolio and consider divesting brands such as SodaStream and Starry.

While the agreement with Elliott does not include a board seat, the investor said it welcomed PepsiCo’s commitment to refreshing its board. Last month, former Walmart executive Steve Schmitt took over as chief financial officer, succeeding the retiring Jamie Caulfield.