Nestle Announces Job Cuts: 16,000 Positions to be Eliminated Globally

Nestle, the renowned Swiss food conglomerate known for its popular brands like Nespresso and Perrier, has revealed plans to eliminate 16,000 jobs globally over the next two years.

This decision aims to enhance savings targets to 3 billion Swiss francs by 2027, following disappointing sales results. The announcement significantly boosted Nestle's share price, which surged over 8% in early trading.

CEO Philipp Navratil, who recently took charge, emphasized the need for Nestle to adapt swiftly to changing market conditions. He stated that making "hard but necessary decisions to reduce headcount" is essential for the company's future.

The job cuts account for approximately 6% of Nestle's total workforce, with 12,000 positions being white-collar roles expected to save the company around 1 billion Swiss francs—double the previous estimates. Additionally, 4,000 job reductions are already in progress within production and supply chain operations.

Navratil's plans to elevate the savings target from 2.5 billion to 3 billion Swiss francs highlight a strategic shift towards aggressive cost management. Analysts view this approach as a positive step towards stabilizing the company, which has faced challenges, including leadership changes and controversies surrounding its bottled water brands.

Despite the recent downturn in sales, with a 1.9% decline to 65.9 billion Swiss francs, organic sales growth remains strong at 3.3%, largely driven by price increases. Analysts are hopeful that Navratil's leadership will restore Nestle's growth momentum as it navigates through this transitional phase.