Major Workforce Reduction at Nestle
Nestle, the world’s largest packaged food company, will eliminate 16,000 jobs globally as new CEO Philipp Navratil implements what he described as necessary changes to transform the business, according to Reuters reports. The job cuts represent approximately 5.8% of Nestle’s workforce of around 277,000 employees and are part of a broader efficiency push announced on Thursday.
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Cost Savings Target Increased
The company has reportedly raised its cost savings target to 3 billion Swiss francs ($3.77 billion) from the previous 2.5 billion francs by the end of 2027, according to the new CEO’s statements. Navratil emphasized that “the world is changing, and Nestle needs to change faster” in what analysts suggest represents a significant strategic shift for the Swiss food giant.
Management Turmoil and Leadership Changes
The restructuring announcement comes during what sources indicate has been an unprecedented period of managerial turmoil at Nestle. Navratil replaced former chief executive Laurent Freixe, who was reportedly fired in September over an undisclosed relationship with a direct report. Additionally, former chairman Paul Bulcke stepped down early to make way for former Inditex chief Pablo Isla just two weeks later.
Breakdown of Job Cuts
According to the report, the workforce reduction will include 12,000 white-collar positions over the next two years, with an additional 4,000 jobs being eliminated as part of ongoing initiatives in manufacturing and supply chain operations. The company stated these measures are essential for improving efficiency and competitiveness in the challenging market environment.
Financial Performance and Market Reaction
Nestle’s shares reportedly jumped approximately 8% in early trading following the announcement, indicating investor approval of the aggressive cost-cutting measures. Bernstein analysts described the quarterly results as adding “fuel to the turnaround fire,” with the headcount reduction representing what they called a “significant surprise” to market observers.
Sales Growth Shows Positive Signs
The report states that Nestle achieved a 1.5% rise in real internal growth during the third quarter, significantly exceeding analysts’ expectations of 0.3% growth. This measure of sales volumes may provide Navratil with what sources suggest is much-needed breathing space as he implements his turnaround strategy following his sudden promotion to CEO.
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Strategic Reviews Underway
According to company statements, Nestle is conducting strategic reviews of its waters and premium beverages business, along with low-growth, low-margin vitamins and supplements brands. Navratil emphasized that driving RIG-led growth remains the company’s highest priority, stating they are “fostering a culture that embraces a performance mindset.”
Financial Outlook Maintained
Despite the significant restructuring, Nestle reportedly maintained its 2025 outlook, with the company forecasting organic sales growth improvement compared to 2024. The company predicted its underlying trading operating profit margin would reach, or exceed, 16%, with a medium-term forecast of at least 17%, according to the financial report.
Regional Performance Varies
Quarterly sales growth was reportedly driven by pricing-led upticks in coffee and confectionery categories, though Greater China remained a challenge. CFO Anna Manz indicated that Nestle had been too focused on driving distribution across China and insufficiently focused on building consumer demand, requiring what she described as a correction in strategy.
Reporting Source: This coverage is based on reporting by Alexander Marrow of Thomson Reuters, with editing by Dave Graham, Lisa Jucca and Barbara Lewis.
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