PepsiCo cut nearly 2,000 manufacturing jobs across eight states in 18 months, even as revenue grew 2.6% in Q3 2025.
Workers in Florida, New York, California, and Michigan received termination notices before the holidays. CEO Ramon Laguarta told investors, “The demand signal we had in ’23 is different from the demand signal we have in ’25.”
Unemployment hit 4.3% in August—the highest in four years—while the economy added 911,000 fewer jobs than reported.
Volume Collapse Accelerates
North American snack volumes declined 4% in Q3 2025, prompting the company to close plants that are no longer needed.
Consumers bought fewer chips despite prices peaking at $6.68 for a 16-ounce bag in October 2023. The North American Food division reported a 3% decline in revenue, while international operations experienced growth.
Only 15% of consumers globally increased their snack purchases in the past year, while one-third opted for healthier alternatives instead.
Manufacturing Footprint Shrinks
Frito-Lay started operations in 1965 when it merged with Pepsi-Cola to create PepsiCo. The company built dozens of plants nationwide, producing Doritos, Lay’s, Cheetos, and Fritos, which have become household names.
In 2010, PepsiCo bought back its largest bottler to integrate operations.
However, pandemic-era investments now appear misguided for 2025’s reality: Americans consume fewer chips and drink less soda than forecasters predicted three years ago.
Industry-Wide Contraction
Food manufacturers announced plant closures throughout 2024 and 2025 as consumer preferences shifted.
General Mills plans to close three of its Missouri plants by 2029, targeting $100 million in annual savings. Post Holdings will close two of its cereal plants by the end of 2025, affecting approximately 300 workers.
Del Monte closed a Washington facility impacting 499 workers, then filed for bankruptcy on July 1, 2025. General Mills saw sales decline 5%, reflecting broader challenges in the processed food industry.
Six Facilities Eliminated
PepsiCo filed closure notices for six facilities affecting 1,850 workers: two in Orlando (500 workers), Rancho Cucamonga (480), Liberty, New York (287), Detroit (83), and four bottling plants (400+).
The Orlando plant laid off 454 employees on November 4, 2025, with an additional 46 by May 2026.
California closed in June after 50 years. Liberty shut down on May 21. Detroit stopped production on September 27. Four bottling plants closed throughout 2024.
Orlando Blindsided
Florida workers arrived at work on November 4, 2025, to learn they had lost their jobs without warning.
The company filed termination notices the same day. Positions included laborers, machine operators, mechanics, coordinators, and supervisors.
Workers told local media the closure shocked them, given the plant’s steady operations.
PepsiCo called it “a difficult decision” and promised assistance with the transition and 60 days of pay, as required by federal law.
Worst Labor Market
Workers lost jobs with no union protection during the worst hiring environment in four years.
Unemployment climbed to 4.3% in August 2025—the highest since October 2021. Job growth added just 22,000 positions in August, far below the 75,000 forecast.
Long-term unemployment reached 25%, the highest since early 2022. Economists say that laid-off manufacturing workers face significant challenges in finding new jobs, given the weak hiring rates.
GLP-1 Drugs Reshape Demand
Weight loss drugs like Ozempic and Wegovy are changing the snack industry by killing appetites.
Households with one GLP-1 user cut grocery spending by 6% within six months. Cornell University found that higher-income households reduced spending 8.6%, especially on snacks, baked goods, and sugary drinks.
Arkansas researchers found that users eat 700 fewer calories daily and avoid processed foods. Six million Americans now use these drugs, but 137 million qualify—a potential disaster for snack brands.
Market Pressure Intensifies
Elliott Investment Management bought a $4 billion stake in September 2025 and demanded changes.
The activist investor told PepsiCo’s board that “strategic and operational issues” caused “disappointing financial results” and “distorted valuation.”
Elliott urged the company to sell its bottling operations and dump underperforming assets—moves that would reshape the entire business.
PepsiCo’s stock fell 2% in 2025, badly trailing Coca-Cola. CEO Laguarta promised a “clear line of sight” to growth in 2026.
Sixty-Year Legacy Ends
Orlando’s plant opened in 1965—the same year Frito-Lay merged with Pepsi-Cola. It predated Disney World by six years and employed 490 people before closing.
The Silver Star Road facility produced millions of bags of Lay’s, Doritos, and Cheetos for generations. Property records show PepsiCo owns the site but hasn’t listed it for sale.
The closure erases 60 years of knowledge and community ties—collateral damage in a restructuring driven by spreadsheets.
Asset Divestment Begins
The company sold a third Orlando property earlier in 2025, initially planning to stay as a tenant before abandoning Central Florida entirely.
The warehouse closing in May 2026 is owned by a third party, indicating that PepsiCo is vacating leased facilities.
Supply Chain Dive reported the company will test combined snack and beverage warehouses in Texas as part of its “One North America” plan.
Management called the closures necessary to eliminate “manufacturing nodes that are not needed anymore.”
Leadership Transition Looms
CFO Jamie Caulfield announced retirement on October 9, 2025, admitting the snack division showed “subdued performance in recent quarters.”
CEO Laguarta said the company acts “with a lot of sense of urgency” to boost growth and promised improvement in 2026.
The team emphasized “being brilliant at the basics”—offering the right prices, service, and execution.
Laguarta’s repeated talk of “the right cost structure” and “right-sizing” suggests that more job cuts and closures may be on the way.
Innovation Push Accelerates
PepsiCo bets on healthier snacks to win back consumers. Laguarta told analysts “More healthy, ‘permissible’ snacks are coming.”
The company removed artificial colors and flavors, switched to premium oils such as olive and avocado, and introduced smaller pack sizes.
Pepsi Zero Sugar, SunChips, and Simply chips experienced growth in 2024, while value brands such as Chester’s and Santitas also performed well.
The company added more chips per bag and increased promotions, but volumes continued to decline.
Skepticism Remains
PepsiCo maintained modest 2025 guidance in October, expecting earnings to be “roughly unchanged” and revenue growth in “low single-digit percentage.”
The company states that it will return to long-term growth in 2026, but this depends on international expansion, while North American volumes continue to decline. Coca-Cola beat PepsiCo’s stock performance in 2025.
Analysts question whether selling both snacks and beverages hurts more than helps. The core problem remains: Americans consume fewer chips and drink less soda than they did three years ago.
What Comes Next?
Will closing plants and cutting 1,850 jobs be enough to meet the shift in consumer demand?
With weight loss drugs proliferating, inflation-weary shoppers opting for healthier foods, and activists demanding changes, the old playbook may no longer be effective.
Can management switch from selling volume to selling value before competitors take market share? The 1,850 workers who lost jobs show the human cost.
The big question: Will PepsiCo emerge stronger—or are these closures just the start of a longer decline?