Pepsi is having trouble with its sales, so the soda company decided to let go of several of its workers to make up for the expected losses. The challenge arose after Philadelphia imposed a soda tax that made the product more expensive.
According to a Business Insider report, about 20% of Pepsi's 423 workers in Philadelphia will lose their jobs. The company said it has given the decision careful consideration, especially since the beverage tax that the state imposed is poised to increase annually after it was first mandated in 2016.
The jobs that will be affected are frontline and supervisory roles. Pepsi is hoping to cut costs in order to prevent any losses that the soda tax will bring to the company.
Philadelphia's soda tax was meant to encourage healthy living by making unhealthy food and beverages more expensive. It appears that the state is successful in its goals as consumers change their buying habits after the price of soda soared exceptionally after the tax was imposed.
6 ABC reported that the exact number of workers that could potentially lose their jobs is in the range of 80 to 100. The layoff will be gradual and will happen in a span of a few months, according to reports.
Pepsi has been struggling with selling its products after the soda tax was imposed. In Philadelphia, its sales dropped 40%, mainly due to the negative impact of the soda tax on consumer habits.
City spokesperson Lauren Hitt criticized Pepsi for its decision. She claimed that the soda company is using its employees like hostages in order to turn over the soda tax mandate. She noted that Pepsi recently enjoyed billions in profits, so it can still afford the impact of the tax without having to let go of its employees.
In other news, Jobs & Hire previously reported that some Outback Steakhouse, Bonefish Grill, Carrabba's Italian Grill and Fleming's Prime Steakhouse restaurants are closing.