By now, you’ve probably heard about the latest round of job cuts at the auto parts manufacturing giant Pepsico.
While it’s true that some of the jobs affected have been outsourced to third-party companies, the news from the automaker’s headquarters in San Diego has a more sinister side.
On Friday, Pepsicos chief financial officer, Eric Wieser, said the company will shut down production of some of its products, including its own fuel-sensing system, as part of a restructuring plan.
The company said the move is expected to take effect sometime in the third quarter.
“Our goal is to reduce the workforce and our costs, and in order to do that, we will not be producing our fuel-screening systems,” Wiesger told reporters on Thursday.
“This is part of the restructuring that we’re undertaking.”
Wieser did not detail the specific parts affected, but said the automanufacturing division, which makes parts for vehicles and parts for other companies, will cut 1,500 jobs in total.
Wiesers announcement came just a day after the company announced it had fired 1,000 employees in a deal to save $1.6 billion.
The deal was announced on September 12, and Pepsics CEO Brian L. Johnson said the cuts would save Pepsican $200 million.
The company said in its press release that the layoffs are due to its “growing and increasingly difficult business environment,” which has resulted in “an increase in our cost structure.”
Woeser said the overall layoffs will affect about 2,500 employees.
That includes 1,100 people who will be laid off in manufacturing, and 500 in marketing and public relations.
Johnson told CNBC on Thursday that the company expects to save another $400 million by reducing its workforce, which is about 50 percent larger than what it was last year.
Pepsico has been in talks with the U.S. Department of Labor, which could lead to a partial shutdown of some parts production, Wiesers spokesperson told Business Insider.
But the company did not have any specific plans on how it would respond to the shutdown.
Pepsico’s decision to close down some of it’s U.T.S., R&D and parts production comes as it seeks to make a turnaround for its struggling business.
The automaker is also looking at possible mergers with rivals such as Ford and General Motors.