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Pepsi Bottling to combine units, cut some 700 jobs
NEW YORK (Reuters) - Pepsi Bottling Group Inc. (PBG.N) said on Wednesday that it would combine some field operations in the United States and Canada and realign its work force to improve productivity, cutting up to 700 jobs.
The largest bottler of PepsiCo Inc. (PEP.N) drinks said these moves would lead it to record a pretax charge of $30 million to $40 million, or 9 cents to 12 cents per share, in the second half of the year, mostly for severance and other employee-related costs.
The company plans to spend $20 million to $25 million on the restructuring, and expects to reap about $30 million in annualized, pre-tax savings.
Pepsi Bottling said there will now be six business units in the United States and Canada, instead of eight. The company will eliminate about 150 management positions and up to 550 hourly positions.
The company also said that due to changing customer and consumer demands, it is evaluating its vending machine business. That review could result in an additional non-cash charge in the second half of the year to retire some machines.
Excluding these items and a previously announced benefit, the bottler still expects earnings per share of $2.02 to $2.07 for the full year and operating free cash flow of $540 million to $550 million.
(Reporting by Martinne Geller)
