PepsiCo has closed its bottling plant in Knoxville, Tennessee, eliminating 112 jobs as the beverage group ramps up efforts to tackle weakening performance in its soft drink business
The plant was shut down immediately, the company said in a statement Monday. But affected employees will continue to be paid through January 1. PepsiCo said it was exploring opportunities for them at other nearby facilities.
The plant made drinks for a variety of the company’s brands. A Worker Adjustment and Retraining Notification (WARN) notice said the shutdown affected employees in manufacturing, maintenance and warehouse roles.
The move comes as PepsiCo has ramped up efforts to cut costs and improve business performance. Earlier this month, CEO Ramon Laguarta acknowledged that the company’s soft drink results were disappointing, attributing it to an ineffective beverage portfolio in the market.
Laguarta has also cited a wider cost-cutting strategy, saying activities not immediately connected to growth will be dropped as company priorities.
The pressure is evident in PepsiCo’s recent performance. The company said North American volumes fell 2% last quarter and it is looking at further price increases and accelerating product innovation across its beverage portfolio. Mountain Dew, Pepsi and Poppi are among the other brands set for a new surge.
PepsiCo said sales and delivery teams will stay in the area after the Knoxville bottling plant closes.
The company has thanked employees impacted by the decision and the local community for their contribution and support.
