Pepsi to axe jobs in new war on Coca-Cola

Pepsi has promised to take the fight to its arch-rival Coca-Cola, with an extra $600m (£378m) marketing and advertising blitz.

Pepsi, whose drinks include Mountain Dew and Sierra Mist as well its namesake cola, is to cut 8,700 jobs to pay for the new spending. The job losses represent 3 per cent of the workforce and will be spread over 30 countries and across the group's drinks and snacks businesses.

The decision to refocus on the core fizzy drinks business follows several years of investment in new, healthier drinks and snacks, such as hummus and drinkable oatmeal. Pepsi has slipped to No3 in the North American fizzy drinks market, behind Coca-Cola and Diet Coke.

Indra Nooyi, who has made the move into health products central to her five-year tenure as chief executive, defended that strategy at a meeting with investors yesterday. "It's an 'and' game, not an 'or' game," she said.