Mayor Jim Kenney has been busy making changes under his new administration in Pennsylvannia. In an attempt to save people from themselves, a new tax was imposed on sweetened beverages in order to push some new health initiatives. Due to the diminished sales of Pepsi due the new tax on sweetened beverages, Pepsi has had to resort to laying people off. Eighty to one-hundred workers will be losing their jobs across three plants that serve the city. 423 people are under the employ of Pepsi in Philadelphia, so they’re roughly letting go of ONE FOURTH of their workers due to this tax. This has spurred a media frenzy where politicians are blaming Pepsi for using this layoff as a bargaining chip, but Pepsi is not at fault. The company was only adapting to market changes, just like any good business does. If anyone is to blame, it’s those behind the beverage tax.
The layoffs come in response to the beverage tax, which has cut sales by 40 percent in the city, PepsiCo Inc. spokesman Dave DeCecco said.
“Unfortunately, after careful consideration of the economic realities created by the recently enacted beverage tax, we have been forced to give notice that we intend to eliminate 80 to 100 positions, including frontline and supervisory roles,” DeCecco said.
The Kenney administration however, claims that this is some sort of insidious plot intended to twist the arms of the legislature and City Hall. Does anyone in the mayor’s office understand how completely insane this conspiracy theory sounds? Businesses operate strictly on a profit driven basis. What management team in their right mind would lay off a quarter of their workforce if they still had deliveries to make and commitments not only to their shareholders but to their distributors, just to score some political points? The city made a decision to tax these products at a crazy rate. Sales are down and that is something which is easily documented. I suppose you could try to pretend that those two facts are unrelated, but if you fail to offer an alternate explanation then you are taking a deep dive into fantasyland.