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Pepsico plans to close the Walkers snack plant in Peterlee (United Kingdom) - 380 jobs at risk

Pepsico plans to close the Walkers snack plant in Peterlee (United Kingdom) - 380 jobs at risk

Aerial view of the Walkers Peterlee Complex at the Stephenson Road. The factory can be seen at the right, while the distribution center is located on the left. (Courtesy: Google Maps)

Pepsico, the owner of the Walkers snack brand, has announced the intended closure of the Walkers Snack factory in Peterlee, Durham County, United Kingdom.

Shutting down the plant puts a total of 380 jobs at risk, 355 in production and 25 in transport. It has been proposed to shut down the manufacturing operation per December 31, 2017.

Tracey Foster, managing director at Pepsico UK:

“In order to improve the efficiency of our UK snacks manufacturing operations, we are proposing the closure of our factory at Peterlee.”

“Crisps currently produced at the site would be manufactured at our other facilities in the UK.”

“Peterlee has been an important site for our business but the changes we are proposing present significant productivity and efficiency savings crucial for ensuring the long-term sustainable growth of our business in the UK.”

“We appreciate this is upsetting news for everyone at the Peterlee site.”

“No decisions will be made without first consulting employees and their representatives.”

“We would also like to reassure colleagues that we will be providing on-going support and assistance from this point onwards.”
The news comes just weeks after PepsiCo reported an 18% drop in Q4 net income to 1.4 billion US dollars from 1.7 billion US dollars during the same period in 2015.

Pepsico has charged ahead with its 'productivity' plan, which has seen the company invest in automation, and work at 'optimising' its global operations in part by 'closing certain manufacturing facilities'.

PepsiCo's Productivity Plan

Reporting by Bloomberg on February 13, 2014

PepsiCo’s productivity plan, first announced in 2012, will be extended another five years, from 2015 through 2019, the soft drinks and snacks company announced on Thursday.

The plan will result in cost savings of $1 billion a year, PepsiCo says, with about 40 percent coming from labor cuts, Chief Financial Officer Hugh Johnston told Bloomberg TV.

Indra Nooyi, PepsiCo Chief Executive:

“Such initiatives have people implications globally at all levels.”
Under the plan, PepsiCo will increase investment in manufacturing automation, close some manufacturing facilities, reengineer its distribution network in developed markets to be more efficient, share more back-office services, and simplify organization.

Productivity at the company hasn’t kept pace with sales growth.

“We see opportunities because of previous investments we made in information systems, to really make our supply chain more efficient and our go-to-market systems more efficient.”

“As a result, we will be seeing cost-cut opportunities really across the board.”
Nooyi also said the company would provide “transition support” to affected employees that will include job training assistance.

Source: Bloomberg, February 13, 2014)

Pepsico has reduced its global workforce from 297.000 in 2011 to 263.000 in 2016
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PepsiCo Europe includes all Pepsico's beverage, food and snack businesses in Europe and South Africa.
Walkers is the market leader in the UK. The company is part of the Pepsico/Frito-Lay concern. Brand names include sensations, wotsits, potato heads, Doritos, Sunbites and quavers.
PepsiCo is one of the world's leading food and beverage companies with over $65 billion in net revenue in 2012 and a global portfolio of brands, including several savory snack brands.
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