PepsiCo said Tuesday it has agreed to slash 20% of its soda and snack lineup in the US, lower some prices — and layoff an unspecified number of workers — as part of a deal with activist investor Elliott Management.
Its well-known array of snacks includes Lay’s, Cheetos, Doritos, and Funyuns, as well as drinks like Pepsi and Mountain Dew. The food giant did not specify which brands would be cut from its lineup.
The announcement marked the company’s latest change to product offerings since billionaire Paul Singer’s Elliott built up a $4 billion stake in the company earlier this year and pushed it to reduce its complex brand portfolio.
PepsiCo – eager to cut costs amid Elliott’s activist campaign – told employees that it “will be making structural changes to our business that will affect some roles in the company,” according to an internal message sent to workers on Sunday that was obtained by Bloomberg.
The company did not specify how many workers or what area of the company would be impacted. But it instructed employees across several North American offices, including its Purchase, NY, headquarters, to work remotely this week.
On the product front, PepsiCo has repackaged its Lay’s potato chips to highlight that they’re made with “real potatoes” and swapped out artificial dyes for natural alternatives in the barbecue flavor.
It has also unveiled makeovers of its Doritos and Cheetos products, stripping the chips of all synthetic colors after Health Secretary Robert F. Kennedy Jr. called for conglomerates to stop using a slew of artificial food dyes.
PepsiCo has pledged to offer new products that have more protein and fiber, along with reduced-sugar options.
“The message you should take from this is it’s not business as usual here,” PepsiCo Chief Financial Officer Steve Schmitt said during a call with analysts on Tuesday.
The company said it expects organic revenue growth of 2% to 4% in fiscal 2026. Analysts had estimated about 2.7% growth.
PepsiCo CEO Ramon Laguarta said the company plans to use savings from cost-cutting to lower some prices across its top brands, which it is hoping will ramp up sales.
Inflation-battered Americans have largely shunned pricey snacks and sodas at the grocery store. PepsiCo did not specify which products will see lower prices.
“We have the opportunity to reinvest in value in a more substantial way,” Laguarta said Tuesday.
“That gives us quite a lot of confidence that the volume will come.”
In November, PepsiCo announced it would shutter its Frito-Lay facilities in Orlando, Fla., and laid off more than 450 people. It said the layoffs were “driven by business needs.”
Laguarta on Tuesday told analysts that PepsiCo is not considering a “full refranchising” of its North American business – even though Elliott has been pushing the company to consider changes to its current system.
Like other soda companies, PepsiCo relies on both a network of independent bottlers and its company-owned bottling businesses.
Elliott will continue to engage with the company, Laguarta said.
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