Frito-Lay Plant in California Shuts Down, Impacting Hundreds of Workers

A Frito-Lay manufacturing plant in California has been shut down. After 50 years of operation, the snack giant has closed the Rancho Cucamonga plant, potentially impacting hundreds of employees. However, warehouse, distribution, fleet, and transportation segments will remain working out of the facility.

According to KTLA, numerous employees were let go and were not offered transfers to other departments within Frito-Lay. The PepsiCo-owned company did not offer an official number of layoffs or specifics about any severance packages.

“We are truly grateful for all the support over the last five decades from our Rancho Cucamonga manufacturing team as well as the local community,” PepsiCo told USA Today. “We are committed to supporting those impacted through this transition and we are offering pay and benefits to impacted employees.”

PepsiCo is revealing a pattern of closing facilities. In February, PepsiCo laid off almost 300 people when it closed a manufacturing plant in Liberty, New York. A Frito-Lay storage site was shuttered last month, which led to the elimination of 56 employees.

Frito-Lay Is Struggling in North America

In Pepsi’s fourth-quarter earnings report released in February, the food conglomerate revealed that demand for snacks and beverages was falling in North America. Sales of Frito-Lay-branded snacks decreased 3% in the region in Q4 2024.

“In 2024, the salty and savory snack categories underperformed broader packaged food, following multiple years in which these categories had outperformed packaged food,” said CEO Ramon Laguarta and CFO Jamie Caulfield in a joint statement, per CNBC.

Inflation has squeezed consumer budgets, forcing a shift toward essential food items instead of indulgences like packaged snacks. In addition, consumers are shifting toward healthier lifestyles and being more selective when it comes to dietary choices.

Of course, Pepsi as well as other food companies are getting some added pressure from the U.S. Department of Health and Human Services. Secretary Robert F. Kennedy Jr. has been implementing policies that ban artificial ingredients in the food supply.

To boost its snacks business and adjust to market conditions, Pepsi is working on better-for-you products. It’s spending resources to promote its Simply snack line as well as high protein items from its Quaker brand.

Shutting down manufacturing plants that produce Frito-Lay snacks is likely a move to cut costs and ramp up production of other products that are increasing in demand. The California plant closure may just be another sign that the company is conforming to the North American market.