PepsiCo has announced the permanent closure of its Frito-Lay snacks facility in southern California, putting over 200 jobs at risk. Located in Rancho Cucamonga, the plant ended production last year, although distribution and warehousing operations continued.
According to a recent update from PepsiCo Foods US provided to Just Food, the company stated, “We will be shifting these operations to a new distribution center in the local community to better serve our customers and consumers.” Furthermore, they emphasized their commitment to supporting affected employees, pledging to maintain pay and benefits based on their years of service, along with providing transition assistance and career support.
At the time of this writing, PepsiCo had not confirmed the exact number of impacted roles. However, a WARN notice filed by the law firm Strauss Borrelli indicates that 248 staff members will be affected. The firm is currently investigating whether Frito-Lay complied with the WARN Act’s requirement of providing at least 60 days’ notice prior to layoffs.
The closure in Rancho Cucamonga is part of a broader trend of facility shutdowns implemented by the US snacks and beverages giant. PepsiCo operates over 30 Frito-Lay manufacturing plants across the country, producing popular brands such as Cheetos, Doritos, and Fritos. Recently, in November, the company announced a similar closure of a Frito-Lay plant in Orlando. Earlier in February, they disclosed plans to shut down a snacks plant in Liberty, New York, which makes the PopCorners brand, directly affecting more than 200 employees.
PepsiCo’s job cuts are not limited to the United States; the company has also announced headcount reductions in Spain, where reports suggest about 400 roles could be at risk due to the filing of an Expediente de Regulación de Empleo (ERE), a formal redundancy mechanism. In December, PepsiCo also laid off staff at its Cork, Ireland operation to streamline the organization for improved efficiency and growth.
In the latest quarter, PepsiCo Foods North America (PFNA), encompassing the Frito-Lay and Quaker brands, experienced a 6% decline in operating profit. The company attributed this drop to rising costs, increased restructuring charges, and the absence of prior-year benefits. Despite the challenges, PFNA’s revenue rose 1.5% on a reported basis to $8.31 billion for the quarter and remained stable for the year at $27.53 billion.
Meanwhile, PepsiCo’s overall consolidated net revenue for the quarter reached $29.34 billion, a 5.6% year-on-year increase. Over the past 12 months, total revenue climbed 2.3% to $93.93 billion. Net income attributable to the group surged by 66% during the quarter, totaling $2.54 billion; however, it decreased by 14% over the year to $8.24 billion.
In summary, PepsiCo’s strategic shifts amid evolving market demands reflect the ongoing transformations within the food and beverage industry. Companies like PepsiCo must adapt to consumer trends and operational efficiencies to remain competitive in the dynamic food and drink business landscape.
