Food Industry Layoffs

The Lempert Report
January 20, 2023

Phil: Some good and bad news in the food world. The good news is that there's more job openings than ever before. According to the Consumer Brands Association the consumer package goods industry has upwards of 88,000 job openings. How? And the wages are up 5.1% higher than last year, 12.8% higher than November. In 2020 the average facility worker is now earning $21 and 57 cents per hour, which is great. But as, as, as we're hearing this good news, Pepsi has announced that they are laying off employees. We're seeing, you know, Coke taking buyouts, laying off people. We're, we're just seeing more and more companies laying off people from all levels, whether it be executive level, whether it be mid-management, whether it be lower level. 

Phil: And it's amazing to me that what we're seeing, and we, and we talked about this, you know, right before the right before the end of the year, that I think one of the biggest trends that we're gonna see this year has to do with more unionization has to do with, you know, this, this widening disparity of pay that's taking place. And by the way, the same time that Pepsi has said that they're laying off all these people, they're also announced outstanding growth in the third quarter, including a 16% increase in sales. The hikes include a 7% increase in the fourth quarter of the year. So the raising prices 10% and 12% in subsequent quarters. So these companies, while they're laying off people and they're raising prices, are making record profits, 

Sally: Yes, there is, there are very mixed messages coming, coming out about the workforce. And, you know, one example I think of is, you know, I've shared with you, Phil, that the Walgreens down the street from me now is only open from nine in the morning till six at night. And the reason being is that they say that they can't find people to work. And we're, you know, all of these businesses that we're going into and buying food from, we're seeing them struggling with having a workforce. But then we also see that some companies are hiring a lot of people. So,I'm not sure what is going on, but there's definitely a disconnect in the messaging. And some consumers are going to get upset when they feel like they're being charged more, but the companies are making more money than they've made the last few years. 

Phil: Absolutely. And this all has nothing to do with the pandemic. This just has to do, in my opinion, with being a food crime that we've got these companies that are just raising prices. Sure, we've got, we've got some supply chain issues. There's no question about it. We've got some ingredient problems, that are out there, but, when we see in the same sentence, you know, record profits for these companies and sort of a disconnect.