PepsiCo’s Frito-Lay has announced plans to consolidate its manufacturing network, reducing the number of production facilities from 34 to 32 sites. The company said that this had been undertaken in order to increase productivity and optimise its supply chain.
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Production will move to larger, state-of-the-art facilities in Arizona, California, Colorado, Kansas, Texas, Utah and Washington.
Frito-Lay will close plants in Lubbock, Texas, and Honolulu, Hawaii, by the end of the year. A total of 387 jobs will be lost as a result of the closures. Despite the closure of manufacturing operations at these locations, Frito-Lay will retain 113 employees in Lubbock and 123 employees in Honolulu in warehouse and sales operations.
“While the consolidation is strategic for our business, we recognise the personal impact business decisions such as this one have. This is not an easy decision to make,” said Al Carey, president and CEO, Frito-Lay North America. “We are committed to working with and supporting our displaced associates to ensure as smooth a transition as possible.”
Frito-Lay will provide severance pay based on years of service, enhanced retirement benefits, financial counseling and professional outplacement services to workers who will lose their jobs.
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By GlobalData“While productivity is one of the hallmarks of Frito-Lay’s success, these decisions are never easy,” said Rich Beck, Frito-Lay SVP, operations. “The company came to this decision based on a thorough analysis of our manufacturing network. Consolidating production into more efficient, geographically-viable plants optimizes Frito-Lay’s supply chain to ensure continued growth.”
