PepsiCo is intensifying its efforts to reduce costs as the food and beverage giant faces mounting pressure in North America. The company has lowered its full-year profit outlook, raising new questions about its turnaround strategy and the potential impact on workers across its operations.
PepsiCo lowers its 2026 profit forecast
PepsiCo lowered its full-year 2026 earnings outlook on October 8, citing persistent cost pressures and weaker performance in its North American business.
The company now expects core earnings per share to increase by just 1% to 2% for the year, down from its previous forecast of 4% to 6%.
Despite the reduced outlook, PepsiCo reported third-quarter revenue of approximately $25.3 billion, exceeding analyst expectations. However, higher operating costs and weaker beverage sales continued to weigh on profitability.
Company expands cost-cutting efforts
Chief Executive Officer Ramon Laguarta is pushing additional cost reductions and productivity improvements as the company works to strengthen its financial performance.
PepsiCo is also facing changing consumer preferences, inflation-weary shoppers, and increased competition in the beverage market. North American beverage volumes declined 2% in the third quarter, while food sales remained flat.
The company has previously reduced prices on select snack products in an effort to attract customers and improve sales volumes.
Layoffs have already affected PepsiCo workers
PepsiCo’s cost-cutting efforts come amid previously announced workforce reductions.
In September, the company disclosed plans to end manufacturing and warehouse operations at its Cheverly, Maryland, bottling facility, affecting 143 positions. A separate notice in South Carolina listed 105 affected workers, with layoffs scheduled for October.
These workforce actions were announced before the October 8 earnings update and should not be interpreted as newly announced layoffs.
PepsiCo’s latest forecast highlights the challenges facing one of the world’s largest food and beverage companies as it attempts to restore growth while controlling expenses.
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