PepsiCo Trims Maryland Workforce While Betting on Mexican Digital Retail

PepsiCo cut 98 of 143 jobs at its Cheverly, Maryland bottling site as weak North American margins push it toward cost cuts and digital growth in Mexico.

PepsiCo is cutting deep into its U.S. bottling footprint at the same time it pushes a digital growth story south of the border. At the Pepsi Bottling Group site in Cheverly, Maryland, 98 of 143 employees were let go on Monday — a reduction of nearly 70 percent — with local officials notified the same day.

The facility along the Baltimore-Washington Parkway in Prince George's County has operated for six decades. Production, warehousing, the vehicle fleet and transportation operations all absorbed losses. PepsiCo says sales and delivery to customers will continue without interruption despite the scale of the cutback.

A Pattern of Operational Slimming

The Maryland move is the latest in a series of adjustments. A little over a month ago, the company streamlined its U.S. food portfolio. Leadership has shifted too: Victoriano Perez Mies, a roughly two-decade PepsiCo veteran who most recently served as Senior Vice President overseeing the European supply chain, left the company in August.

While existing U.S. sites are being pared back, PepsiCo is funding digital sales channels abroad. On Wednesday it launched MiNegocio+ in Mexico, a platform aimed at independent retailers that draws on purchasing patterns, seasonality and local demand data to automate orders and generate personalized recommendations. Mexico ranks among the company's largest markets.

Margins Under Pressure at Home

Cost efficiency has become the leitmotif of the current fiscal year as weaker North American margins bite. Core operating profit climbed 4 percent in the second quarter of 2026, lifted by productivity gains and net price increases — yet the core operating margin still slipped 40 basis points, underscoring how heavy the headwind is in the home market.

International operations expanded on the margin front while North America contracted, dragged down by ongoing investments in product affordability and an unfavorable volume and channel mix. Management expects higher input cost inflation in the second half but intends to offset most of it through record productivity savings and tariff refunds. Cost control remains the primary lever, with pricing power running up against limits compared with prior years.

Rivals Pull Ahead on Margins

The competitive scorecard is mixed. Coca-Cola lifted its gross margin by 120 basis points and its operating margin by 90 basis points in the same quarter — a markedly stronger trend than PepsiCo's. Keurig Dr Pepper also posted gains: 100 basis points of SG&A leverage and an 11.9 percent increase in operating profit for its U.S. refreshment beverages segment, backed by a $400 million cost synergy target.

UBS recently named Coca-Cola among its preferred consumer holdings, citing higher expected organic revenue and earnings growth relative to the industry — an environment in which PepsiCo is not currently generating the same momentum.

Where the Stock Stands

The equity closed yesterday at EUR 117.42, just 0.6 percent above its 52-week low of EUR 116.72, a level first touched in January. Against the 52-week high of EUR 144.88 set in March, the gap is roughly 19 percent. That price action tracks the operating picture: international segments are making headway while the core North American region holds back growth, and competitors keep delivering more consistent margin numbers.

For investors, the pivotal question is whether the announced productivity measures and tariff refunds can genuinely offset the anticipated input cost inflation in the second half. The next quarterly report will reveal whether the North American trend stabilizes — or whether PepsiCo falls further behind Coca-Cola and Keurig Dr Pepper.