PepsiCo plans to cut 8700 jobs, or about three per cent of its workforce, as it seeks to offset high commodity costs and increases investment in advertising and marketing in North America.
The maker of Pepsi soft drinks, Tropicana juice and Doritos chips also reported better-than-expected fourth-quarter results on Thursday. But it forecast a decline in adjusted 2012 earnings.
The company said it expects the restructuring will save an additional $US1.5 billion ($A1.40 billion) by 2014 - on top of $US1.5 billion in cost cutting it previously announced.
The announcement of the job cuts came as the company reported slightly higher earnings for the fourth quarter.
Snack and soft drink makers are facing high commodity costs and changing consumer tastes toward healthier snacks and drinks.
Pepsi's rival, Coca-Cola Co, announced its own cost-cutting program on Tuesday, although Coke said its plan would ultimately add jobs.
PepsiCo has been losing ground to Coke, on the drinks side at least, since Coca-Cola has more of an overseas presence, particularly in emerging markets. Pepsi's snack business has been stronger.
Pepsi said "tough decisions" were needed because it expects 2012 will be the second year in a row with higher-than-average costs for commodities. It said it is not able to offset those costs with higher prices because of consumer caution in light of the uncertain economy, so the plan to cut costs elsewhere is needed.
"2012 will be a year of transition, one in which we will make the right investments to position PepsiCo properly to achieve long-term, high-single-digit core constant currency earnings per share growth," CFO Hugh Johnston said in a statement.
At the same time, PepsiCo plans to increase advertising and marketing behind its brands by $US500 million to $US600 million in 2012, with a particular focus on North America. It also plans to increase dividends and share buybacks in 2012 to return cash to shareholders. It also plans to invest $US100 million in store racks, displays and coolers.
Meanwhile, the company also said its net income for the quarter ended December 31 rose four per cent to $US1.42 billion, or 89 cents per share. That's up from $US1.37 billion, or 85 cents per share, last year.
Excluding restructuring and other costs, net income was $US1.15 per share. Analysts expected $US1.13 per share, according to FactSet.
Revenue rose 11 per cent to $US20.16 billion. Analysts expected $US19.89 billion. Higher prices and cost cuts helped offset higher commodity costs. Volume rose seven per cent.
The company took a $US383 million charge in the fourth quarter related to the restructuring plan and said it will take $US425 million in charges in 2012. It will take $US100 million in charges between 2013 and 2015.
For the year, net income rose two per cent to $US6.46 billion, or $US4.03 per share. That compares with $US6.33 billion, or $US3.91 per share.
Revenue rose 15 per cent to $US66.5 billion from $US57.84 billion.
PepsiCo says it expects adjusted 2012 earnings to fall five per cent in 2012 during a transition and then rise in the high single digits after that.
