Swiss food giant Nestlé announced plans to eliminate 16,000 positions globally over the next two years following the appointment of Philipp Navratil as CEO. The reductions, representing about 5.8 percent of its roughly 277,000 employees, mark one of the largest restructuring efforts in the company’s recent history.
Navratil also raised the company’s cost-savings goal to CHF 3.0 billion (≈ USD 3.77 billion) by end-2027, up from a prior target of CHF 2.5 billion.
The move sends a clear signal to markets and investors: Nestlé is intent on streamlining operations and restoring growth momentum amid mounting external pressures. The company has faced challenges from rising costs, U.S. import tariffs, and slowing volume growth in key markets.
Shares jumped around 7–8 percent early in trading following the announcement, reflecting investor optimism about the turnaround plan. Over the next two years, 12,000 of the 16,000 job cuts will be in white-collar positions. Operations, supply chain, and manufacturing will be impacted by the remaining 4,000 cutbacks. “The world is changing, and Nestlé needs to change faster,” Navratil said, referring to these choices as “hard but necessary.” In addition to laying off employees, the business is examining underperforming businesses, like its luxury beverage and vitamin and supplement sectors.
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Significant upheaval is occurring at the leadership level at the time of the restructuring: Laurent Freixe, who was fired in September due to an unreported relationship with a direct report, was replaced by Navratil. Pablo Isla, a former Inditex employee, took over as chairman shortly after longtime chairman Paul Bulcke resigned early. The disruption comes after a series of leadership changes. Freixe was brought in less than a year ago to revive growth following the resignation of his predecessor, Mark Schneider. The succession volatility has alarmed analysts and investors, who see it as a drag until a more definite path is found.
Nestlé maintained its 2025 guideline despite the substantial cuts: In comparison to 2024, the corporation anticipates faster growth in organic revenue. With a medium-term objective of at least 17 percent, its target for the underlying trading operational profit margin is still 16 percent or higher by 2025. Nestlé produced better-than-expected results in the third quarter: Compared to the average expectation of 3.7 percent, organic sales increased 4.3 percent. The volume-based measure of real internal growth increased by about 1.5%, exceeding projections as well. Market performance varied; Greater China underperformed, which led Nestlé to refocus its efforts from wide distribution to increased investments in customer demand. Margin pressure is still a possibility. The business must contend with increased input prices and additional U.S. import taxes on Swiss goods, which in certain situations can reach 39 percent.
Cost inflation, tariff exposure, and more discerning consumer purchasing are all problems facing the worldwide packaged goods industry. Nestlé’s twin levers, portfolio pruning and cost reductions, are viewed by analysts as hazardous but important.