Pepsi products are displayed in a supermarket in New York City, U.S. February 15, 2017. REUTERS/Brendan McDermid

(Reuters) - PepsiCo Inc PEP.N said on Wednesday it would cut 80 to 100 jobs in Philadelphia as the city's new sugar-sweetened beverage tax hurts demand for its products.

Philadelphia imposed a tax of 1.5 cent per ounce on sugary and diet drinks to combat rising obesity and diabetes in the city. The tax became effective on Jan. 1.

PepsiCo’s beverage sales fell 40 percent in the city because of the tax, company spokesman Dave DeCecco told Reuters in an email.

The cuts will take place over the next few months and will include frontline and supervisory jobs, the company said.

“If the tax is struck down or repealed, we plan to bring people back to work,” DeCecco said.

PepsiCo, which also makes Frito Lays snacks and Doritos chips, has 423 employees at three locations in the city.