PepsiCo is cutting roughly 1,000 jobs in North America, the company told employees on Monday, as weak beverage sales and a lowered earnings outlook force structural cost reductions across its largest market.

The decision follows a difficult stretch for the snacks and drinks giant. North American beverage volume fell 2% in the latest quarter, while volume in the North American convenient foods division was flat. In October, PepsiCo cut its full-year core earnings forecast: it now expects core earnings per share to grow 2.5% to 3.5% for fiscal 2026, down from prior guidance of growth at the low end of a 5% to 7% range.

What did the CEO memo say?

Ram Krishnan, CEO of PepsiCo North America, laid out the goals in a Monday memo to employees obtained by CNBC. "We need to be faster, more connected, and more capable, while continuing to invest in growth," Krishnan wrote.

The memo acknowledged deep-seated problems in how the organization operates. It said "too much of how we work today remains complex and fragmented," according to Bloomberg. Krishnan told employees that PepsiCo will "make changes across parts of our organization" over the coming week, Bloomberg reported.

How large is the cut relative to the workforce?

The reduction is small in proportional terms but significant in absolute headcount. PepsiCo had roughly 306,000 employees globally at the end of last year, some 125,000 of them in the U.S., according to a company filing. The 1,000 positions being eliminated amount to well under 1% of the global workforce — roughly one job cut for every 300 employees worldwide.

Why are sales under pressure?

Consumers have grown choosier about how they spend, and PepsiCo has struggled to hold its share of the salty snack market, according to Bloomberg. The company responded in February with price cuts of as much as 15% on brands such as Lay's and Doritos to win back shoppers.

The turnaround has not moved fast enough. Chief Financial Officer Steve Schmitt said on the company's earnings call that the domestic recovery is progressing more slowly than expected.

Chairman and CEO Ramon Laguarta has framed the restructuring as a financing mechanism rather than pure retrenchment. He said PepsiCo is pursuing structural cost reductions in order to fund growth-oriented investments.

How has the stock reacted?

PepsiCo shares rose in afternoon trading on Monday following news of the cuts. The broader picture is less favorable: the stock is down less than 1% this year, while the S&P 500 has gained more than 10% over the same period — an underperformance gap of more than 10 percentage points against the benchmark index.

What comes next?

Employees were told to expect organizational changes in the coming week. The job reductions, the guidance cut, and the slow consumer turnaround together point to continued pressure on management to extract savings and redirect them toward growth.

For now, the market's verdict on Monday was positive: investors rewarded the cost discipline.