Nestlé is embarking on one of its most significant corporate shake-ups in recent years as newly appointed chief executive Philipp Navratil announced plans to cut 16,000 jobs globally over the next two years. The move marks a decisive effort to streamline operations, boost productivity, and restore investor confidence following months of leadership turmoil.
The announcement came during the company’s first trading update since the abrupt dismissal of former CEO Laurent Freixe last month over an undisclosed romantic relationship — a scandal that also prompted the resignation of chair Paul Bulcke two weeks later. Their exits left the world’s largest food and beverage company grappling with instability at a time of slowing growth and mounting debt.
Navratil, Nestlé’s third chief executive in just over a year, told investors that the cuts — representing nearly 6 per cent of the company’s total workforce — are “hard but necessary decisions” to align the company with shifting market realities. “The world is changing, and Nestlé needs to change faster,” he said.
According to the company, the job reductions will affect about 12,000 white-collar roles from its 118,000 office-based employees, and another 4,000 positions across its manufacturing and supply chain operations.
Despite the tough measures, investors appeared optimistic. Shares in Nestlé jumped 7.8 per cent in early Thursday trading, buoyed by stronger-than-expected third-quarter results. The Swiss-based group reported organic sales growth of 3.3 per cent, lifting total revenue to SFr65.9 billion ($83 billion) for the first nine months of the year. Although currency fluctuations led to a 1.9 per cent decline in reported net sales, the company’s real internal growth — its preferred measure of sales volume — rose 0.6 per cent, reversing years of decline.
The new chief executive also announced plans to accelerate cost-saving efforts, increasing targeted savings from SFr2.5 billion to SFr3 billion ($3.7 billion) by 2027. The initiative aims to free up cash and redirect investment toward Nestlé’s best-performing divisions, including coffee, pet care, and health nutrition.
Analysts say Navratil’s early moves suggest a sharper operational focus and a bid to regain market momentum. “Although still very fragile, this set of results will help Nestlé partly restore investors’ trust,” said Jean-Philippe Bertschy, analyst at Vontobel.
The leadership reshuffle also brought in Pablo Isla, former Inditex boss and now Nestlé’s new chair, raising expectations of a wider strategic portfolio review. Investors are urging the duo to consider asset sales or divestments to tackle the company’s debt burden, which has nearly doubled since 2020. Potential moves include selling its confectionery or frozen food units, or reducing Nestlé’s 20.1 per cent stake in L’Oréal.
Nestlé has already taken steps in that direction. Earlier this year, it spun off its European waters business—which includes Perrier—into a standalone entity, and in July, launched a strategic review of its mainstream vitamin brands.
For now, Navratil’s challenge lies in balancing efficiency with growth. His message to shareholders and employees alike was clear: Nestlé must adapt swiftly to changing consumer habits and economic headwinds if it hopes to maintain its leadership in the global food market.