Nestlé has unveiled plans to eliminate 16,000 jobs globally—around 6% of its roughly 277,000-strong workforce—over the next two years. The cuts are part of a sweeping cost-reduction drive led by new CEO Philipp Navratil to revive growth, improve efficiency, and bolster investor confidence. The directive comes alongside an increase in Nestlé’s cost-savings goal to 3 billion Swiss francs by the end of 2027, up from the previous target of 2.5 billion francs.

Of the total job losses, 12,000 will be from white-collar roles, with the remaining 4,000 jobs cut in manufacturing and the supply chain. The restructuring is set to hit every market Nestlé operates in, though the company says the impact will vary locally; it has committed to conducting consultations with works councils in affected countries.

Earlier this month, Nestlé experienced high-level leadership turnover: former CEO Laurent Freixe was ousted after failing to disclose a romantic relationship with a subordinate, and Chairman Paul Bulcke stepped down ahead of schedule. He was replaced by Pablo Isla, formerly of Inditex. This shake-up underpins Navratil’s push to reshape company culture toward performance and accountability.

Despite these tense changes, Nestlé reported stronger than expected third quarter figures: organic (volume and price) growth of 3.3% over the first nine months, though total sales fell 1.9% due to adverse currency effects. In particular, gains in coffee and confectionery product lines helped offset weaker performance in Greater China, where distribution misalignments and declining demand were noted.

Navratil emphasized that the workforce reductions are “hard but necessary” and part of broader efforts to reset underperforming segments and improve margins. As part of his turnaround strategy, Nestlé is reviewing its waters and premium beverages business, and low-margin vitamins and supplements lines, to focus resources on higher-growth, higher-return areas. The company reaffirmed its targets for 2025, including organic sales growth and an operating profit margin at or above 16%.

Source: Reuters.