PepsiCo’s Big Gulp: ‘Team, Great Q4! 8,700 of You Have to Go’

Companies often claim that their greatest asset is their employees. PepsiCo is sending the opposite message with its Feb. 9 announcement that it is cutting 8,700 jobs globally and increasing its investment in advertising and marketing by $500 to $600 million in 2012. This announcement was timed with its fourth-quarter 2011 results, highlighted by a quarterly net revenue increase of 11%.

The overall positive quarterly results may not put the workforce at PepsiCo in a celebratory mood. The key issues for PepsiCo are sagging beverage sales in relation to Coca-Cola, increasing commodity prices, the struggling global economy and investor pressure to split the company in two. The company was looking for savings to offset these factors to impress Wall Street—and will find them in a workforce reduction.

The task for the internal communications staff at PepsiCo couldn't be more difficult, as it must present both the encouraging news about the fourth-quarter results and deal with the fallout of the workforce reduction announcement.

PepsiCo CEO Indra Nooyi told Bloomberg Television's "Inside Track" that "2011 was a good year." She said the economic environment this year is going to be volatile and wanted to build in "breathing room."

Separately, on Feb. 7 Ad Age reported that Bonin Bough is leaving his post at PepsiCo as global head of digital to join Kraft Foods in a "senior role managing consumer engagement." Bough keynoted PR News' Facebook Conferences in August and December 2011, where he made an emphatic case for PR practitioners to take the leading role in making sure their organizations are "digitally fit."

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