Changes in pay for drivers delivering Frito-Lay products by parent company PepsiCo could lead to a shortage of Doritos, Cheetos, and Ruffles across New York City.
Drivers organized the first strike in more than 20 years in December 2016 when changes to their compensation were first proposed, but many are now quitting after seeing their pay drop by one-third.
While the company maintains that employees have “on average seen an increase in overall compensation” in the shift to a more salary-driven pay structure, drivers in the New York area have seen as much as a $30,000 decrease in what they take home.
Many of the drivers are picking up gig economy jobs, like freelancing for Amazon deliveries or providing Uber rides on the weekends, to make ends meet.
Others are leaving the company altogether. About 35 of 140 drivers serving Brooklyn and lower Manhattan and 12 of 105 drivers in the Bronx have quit since the pay structure changes in August.
Cost cutting for Frito-Lay workers comes even as the company’s snack business buoyed falling soda sales, which have been on the decline for more than a decade. Meanwhile, PepsiCo CEO Indra Nooyi received an 18% pay increase in 2015 and a 13% raise in 2016.
Her $31 million in total compensation is about 650 times the salary of a typical worker. PepsiCo drivers, whose union membership dropped from 17% to 6% after a quarter-century of decertification efforts by the company, saw pay in New York drop from about $90,000 to $60,000 after the salary structure changes.
PepsiCo’s growth in the last quarter of 2017 was stronger than expected. Though revenue increased by about 2% last year for Frito-Lay North America, the company’s snacks items, like Cheetos and Doritos, are “bolstering its performance at a challenging time for much of its beverage business, specifically its carbonated drinks,” according to Coins2Day.
The Frito-Lay snack business’ organic sales were up 5% in the fourth quarter of 2017, and the company is looking to place it’s Simply products in Whole Foods as it grows its natural offerings to cater to consumers looking for healthier options.
PepsiCo expects 2018 revenue growth to be similar to last year, when organic revenues rose 2.3%.
