WallStreetJournal.com – Pepsi Bottling Group inc. has announced its plans to cuttoff 1,000 jobs aiming to save $150 million cost, The world’s biggest bottler of PepsiCo products also announced a planned $412 million write-down of its Mexican operations, primarily the Electropura water business, because of weaker-than-expected results.
Pepsi Bottling lowered its profit target by 12 cents to $2.20 to $2.26 a share for the year, citing the dollar and higher-than-expected interest costs on recent bond issuance. The capital markets seizure has resulted in numerous firms selling new debt of late having to agree to higher interest rates than months earlier amid investor skittishness.
The company said it will cut 750 jobs in North America and 200 in Europe as the 70,000-employee company deals with continued slack soda demand in both locales. The layoffs will result in $80 million to $100 million in pretax charges this quarter.
“These moves will allow our business to better deal with the challenging macroeconomic conditions that currently exist”, said Chief Executive Eric Foss. The company expects foreign currency weakness and increased interest costs to continue into 2009.