The new Chief Executive Officer of Nestle, the world’s largest packaged food company, Philipp Navratil, on Thursday, announced plans that the company will cut a total of 16,000 jobs before 2027.
According to Reuters, the jobs represent 5.8% of Nestlé’s around 277,000 employees. Navratil said Nestle had raised its cost savings target to 3 billion Swiss francs ($3.77 billion) from 2.5 billion francs by the end of 2027.
“The world is changing, and Nestle needs to change faster,” Navratil said.
According to the report, Nestle, whose shares leapt by around 8% in early trading, has experienced an unprecedented period of managerial turmoil, with Navratil replacing Laurent Freixe, who was fired in September as chief executive over an undisclosed relationship with a direct report.
According to Reuters, Nestle, whose shares leapt by around 8% in early trading, has been undergoing an unprecedented period of leadership upheaval, with Navratil stepping in following the firing of former chief executive Laurent Freixe in September, over an undisclosed relationship with a direct report.
Navratil said the 12,000 white-collar job cuts over the next two years, in addition to a further 4,000 headcount reduction as part of ongoing initiatives in manufacturing and the supply chain, were part of an efficiency push.
The Swiss maker of KitKat chocolate bars, Nespresso coffee and Maggi seasoning has been fighting to reverse stalling sales growth and arrest a share price slide as it battles U.S. import tariffs, while costs have risen and debt levels have climbed, increasing pressure from investors.
Nestle’s quarterly results “add fuel to the turnaround fire,” Bernstein analysts wrote in a note, naming the headcount reduction as a “significant surprise”.
A 1.5% rise in real internal growth – a measure of sales volumes – in the third quarter, well above analysts’ expectations of a 0.3% rise, may offer Navratil breathing space as he looks to make his mark following his sudden promotion.
Navratil said driving RIG-led growth was Nestlé’s highest priority.
“We are fostering a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded,” Navratil said.
Strategic reviews of Nestlé’s waters and premium beverages business and low-growth, low-margin vitamins and supplements brands are ongoing, the company said.
The Swiss company maintained its 2025 outlook. It said organic sales growth should improve compared to 2024 and predicted the underlying trading operating profit margin, which excludes certain non-recurrent expenses, at or above 16%. For the medium-term, the forecast is at least 17%.
