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NEW YORK: PepsiCo, the maker of Pepsi soft drinks and Tropicana juices, announced a plan to slash 3,300 jobs on Tuesday as weak sales in the US hit its earnings.
Shares in the food and drink group fell 7.6 percent to 57.05 dollars in morning trading, recovering slightly from a 10-percent plunge, as analysts reacted to the weaker-than-expected figures.
As a housing slump and credit crisis bites in the US, analysts say consumers are cutting spending on non-essential items and shopping in convenience stores - a key driver of Pepsico's business.
"We were adversely impacted by continued weakness in the US liquid refreshment beverage category, which resulted in disappointing performance in our domestic beverage business," said PepsiCo chief executive Indra Nooyi in a statement.
"We are taking important steps to revitalise our beverage portfolio."
The group reported third-quarter net profit of 1.58 billion dollars, down nearly 10 percent from 1.74 billion dollars a year ago. Sales grew 10.5 percent to 11.24 billion dollars.
It also trimmed its earnings predictions for the full-year excluding exceptional items to 3.67-3.68 dollars per share from 3.72 dollars previously.
The job cuts will affect 3,300 employees, or 1.8 percent of the company's work force, and result in fourth-quarter charges of 550-600 million dollars. - AFP/de
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