American multinational food, snack, and beverage company PepsiCo is laying off workers at the headquarters of its North American snacks and beverages divisions, according to a new report released on Monday.

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Hundreds of jobs will be eliminated and the cuts affect the company’s North America beverage business, which is based in Purchase, N.Y., and its North America snacks and packaged-foods business, which has headquarters in Chicago and Plano, Texas, people familiar with the development told The Wall Street Journal.

According to a memo sent to staff seen by WSJ, PepsiCo told its staff that the layoffs were intended “to simplify the organization so we can operate more efficiently.” The beverage business shall see heavier job losses while the snacks unit has already let go of employees via a voluntary retirement programme, according to the report.

The development shows that tech layoffs have now begun to spill over to other sectors well. Last week, low-cost fashion brand H&M said it would reduce its global workforce by around 1,500 positions as part of a plan to reduce costs and further improve efficiency.

The Sweden-based company said a restructuring charge of 800 million kronor ($76 million) will be booked in the last three months of the year. The staff reduction is estimated to provide annual savings of about 2 billion kronor ($190 million).

The mass layoffs across major companies, especially in the IT industry, come against the backdrop of a challenging macro environment and an impending recession in the US.

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PepsiCo, meanwhile, raised its full-year revenue and earnings forecast in October after stronger-than-expected third-quarter sales driven by higher prices. However, post that the company’s executives said they were cutting costs to offset the pressure on profit margins and to weather what appeared to be worsening macroeconomic conditions, the WSJ report stated.

With this round of job cuts, PepsiCo joins the likes of Walmart Inc and Ford Motor Co that have been letting go of even as they hold on to front-line staff.

Meanwhile, the US added 263,000 jobs in November, the labour department announced on Friday, another strong month of jobs growth. The unemployment rate remained at 3.7 percent, close to a 50-year low.

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