DO NOT LAY OF 8700 EMPLOYEES AT PEPSICO

      MEMORANDUM

TO:        CEO for PEPSICO
FROM:    CEO of AmFamily
DATE:    February 10, 2012
RE:        Better than expected earnings results in
        8700 layoff due to uncertainty for 2013

IF THE SECOND LARGEST FOOD COMPANY IS LAYING OFF IN GOOD TIMES THEN WE AS A NATION ARE ALL IN TROUBLE


I read in the Epoch Times that PepsiCo reported a fourth quarter increase in net earnings of 11 % (or $20.2 billion) and 15% (or 66.5 billion) for the year.  That’s impressive.

Also this same day, I’m reading that PepsiCo is planning some strategic investments for 2012 which is to include a layoff of about 3% of its workforce (approx. 8700 people). “Strategic” and “layoffs” should not be included in the same article, should it? That’s not so impressive.

I was not sure if that was reported correctly so I went to PepsiCo’s website and confirmed it.

Please be patient with me because I’m not an economist so I want to make sure I get this right; from what I understand these layoffs are a direct result of higher than average costs of commodities such as sugar and grain. Meanwhile, these are costs you would generally pass on to the consumer anyway. I know. I drink a lot of soda so I have watched the prices increase in the last year. Sure, some of the increases are due to higher taxes, but not all.

I would like to let you know that I have also experienced similar increases in commodities in the past few years that have significantly offset my net earnings. My utilities which include heating oil, water, and electricity have all increased. My dry goods, grains, vegetables, and meats have all increased. My home heating oil, homeowner association dues, and insurance have all increased. The toll costs on all of the bridges and tunnel crossings I use for work have increased.

I am not showing any net profits yet and my 2013 outlook is looking even more dismal if the mortgage crisis continues. So please try to refrain from projecting that the only thing certain is uncertainty when you are a more-than-stable corporation right now and will continue to be in the future.

Meanwhile, here are some measures I had to take to get by day to day: I had to liquidate my retirement plans over the years to pay for my increases and additional debt because my company is small and can’t compete in a recession; I had to eliminate, not just cut back, all non-essential items like medical and dental for myself; I even had to cut back on expendable material and non-material things that are essential, however I can revisit them when I show some net profits.

My mortgages are upside down and I can’t sell them. The banks say they can’t do anything. Therefore, I continue to pay for all of them except one that is underwater and in negotiations. I have appealed to debt management because I do not qualify for bankruptcy and I am continuing the pursuit of a financial recovery until I can show a profit again.

In addition, despite my personal financial obligations, I have two children in college at the same time and I still managed to keep them despite their increase in costs. Unfortunately both of them had to move back home as well since they do not have full time jobs and require financial assistance, but we will manage. I have not turned them away, laid them off, or disowned them because times are tough for me. They are my assets as your employees are yours.  Instead, I support them and assist them in their finances and education as much as I am able to. When you take care of what is yours it will produce for you, themselves, and others.

As I mentioned earlier I am not an economist. As a matter of fact, I am a pretty bad investor of businesses and of career choices as I explained above. However, I do know that it is not good business sense to lay off 8700 employees when a company is showing a profit.

You are sending out the wrong message to other corporations and this can only have a negative impact in the long run; that I am certain of. Please think of the impact you will have because companies will always follow suit and do as other successful companies do.

The only thing your company is going to create is Wall Street uncertainty, lack of investor confidence, or even investor confusion, not to mention a negative public opinion for your brand. In addition, there is a lack of respect and appreciation you are now emanating down to the employees you intend to lay off–possibly even to the ones you don’t. It goes like this…

Thank you for working for us and turning us into the second largest food and beverage company, but we’re doing so well we no longer need you.


You are doing this because of pressure from your investors and because you have only showed a little above 2% growth in the past five years. I am sure that there are other areas you can turn to to reduce costs. I have temped for many corporations and I can assure you that there are a lot of wasteful areas you should probably look into.

I urge you to reconsider these layoffs during periods of growth. The economy is finally inching forward and employment is on the rise. This country needs momentum and does not need another 8700 homes going into foreclosure due to layoffs.

I believe that when a behemoth of a corporation as yours turns to layoffs to strengthen their bottom line, it is an act of cowardice. Layoffs should be that last resort for struggling companies and alternate measures should be taken first. 

The gap between the corporations, employees, and government needs to be strengthened and not divided. Right now, we are experiencing all three divisions at one of the worst levels in history. It is everyone’s responsibility to do their part ethically and loyally for the benefit of all and not just a few.

Last man standing is just one man standing alone.