Pepsi Cuts Product Line and Prices in Major Strategy Shift

PepsiCo Slashes 20% of Products in Major Restructuring Deal

PepsiCo is making its biggest strategic shift in decades. The snack and beverage giant is cutting one-fifth of its U.S. product portfolio. This massive restructuring was announced on December 8, 2025.

The move comes alongside aggressive price cuts. It follows a major agreement with activist investor Elliott Management. The goal is to streamline operations and boost shareholder value.

PepsiCo restructuring

Historic Cuts Follow Activist Investor Pressure

The scale of the product elimination is unprecedented for the company. PepsiCo will remove roughly 20% of its U.S. stock-keeping units (SKUs). This affects both its beverage and snack divisions, including Frito-Lay.

According to Reuters, the deal with Elliott Management pressures PepsiCo to improve profit margins. The investor has pushed for significant cost reductions. This has led to planned plant closures and manufacturing line shutdowns.

Workforce reductions are also part of the plan. The Frito-Lay division alone will see a 7% reduction in staff. Broader job cuts across North American operations are expected.

The company is prioritizing automation and supply chain efficiency. These steps aim to lower long-term operational costs. The focus is shifting squarely to core, high-performing brands.

Strategic Price Cuts Aim to Win Shoppers

Alongside the product purge, PepsiCo committed to sharp price reductions. This is a direct response to changing consumer behavior. Shoppers are increasingly focused on value and affordability.

The strategy aligns with actions from major retailers like Target. These retailers have launched their own price-cutting campaigns. PepsiCo’s move is seen as essential to staying competitive on shelf space.

The exact products facing price cuts have not been detailed. However, the company’s Foods division is a primary target. Everyday value pricing will become a key focus.

This shift may benefit consumers on staple items. Products like regular Pepsi-Cola and Lay’s Classic chips could see relief. The company is betting that lower prices will drive volume and customer loyalty.

This sweeping PepsiCo restructuring signals a new era of focus for the conglomerate. By cutting complexity and cost, it aims to compete more aggressively. The success of this bold pivot will depend on execution and consumer response in the coming year.

Thought you’d like to know

Which PepsiCo products are being discontinued?

The company has not released a full public list of discontinued items. The cuts will target underperforming and niche products across both beverages and snacks. Core brands like Pepsi, Doritos, and Lay’s will remain focus points.

Why is PepsiCo cutting so many products?

The primary driver is pressure from activist investor Elliott Management to improve profit margins. A smaller portfolio is easier and cheaper to manage. It allows the company to concentrate marketing and production on its strongest sellers.

Will Pepsi products get cheaper?

Yes, PepsiCo has announced plans for aggressive price cuts as part of this restructuring. The goal is to improve affordability and value for consumers. Price reductions are expected to be most noticeable in the snack food division.

How will this affect PepsiCo’s competitors?

Competitors like Coca-Cola may face intensified price competition on key items. PepsiCo’s streamlined operations could also make it more efficient. This could force other companies to evaluate their own portfolios and pricing strategies.

Are PepsiCo factory closures confirmed?

Yes, as part of the broader restructuring, PepsiCo has confirmed the closure of select manufacturing lines. This is to eliminate redundancy and reduce operational costs. Specific locations have not been widely disclosed.

What is the timeline for these changes?

The product eliminations and operational shifts are slated to be completed by early 2026. Price adjustments may be rolled out gradually before then. The company has already outlined preliminary financial targets for 2026.