Nestlé, the world’s largest packaged-food company, announced plans to cut 16,000 jobs globally over the next two years as part of an aggressive cost-reduction initiative led by its new CEO, Philipp Navratil.
The move is aimed at revitalizing growth and restoring investor confidence after a turbulent leadership period.
In a statement on Thursday, Navratil revealed that the company has set a new target to achieve cost savings of 3 billion Swiss francs (about $3.3 billion) by the end of 2027 – surpassing its previous efficiency goal.
“As Nestlé moves forward, we will be rigorous in our approach to resource allocation, prioritizing opportunities and businesses with the highest potential returns,” Navratil said.
Navratil, who took over just a month ago, emphasized that the company must “move faster to accelerate growth momentum” and be “bolder in investing at scale.”
He outlined a strategy centered on innovation, operational discipline, and a renewed focus on performance.
“We are fostering a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded,” he added.
The CEO said that while the workforce reduction is a difficult but necessary step, it will ultimately “secure Nestlé’s future as an industry leader” while delivering long-term shareholder value.
Nestlé Chairman Paul Bulcke praised Navratil’s strong track record, describing him as a leader capable of delivering results in challenging environments.
His appointment follows a series of leadership upheavals that have rocked the company over the past year.
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Former CEO Laurent Freixe was dismissed in September after an internal investigation found he violated Nestlé’s code of business conduct by engaging in a romantic relationship with a direct subordinate.
Free, who had been instrumental in shaping Nestlé’s strategy and product portfolio, left without an exit package.
His removal came less than a year after his appointment, compounding instability following the earlier voluntary departure of CEO Ulf Mark Schneider amid underperformance concerns.
The leadership turmoil coincided with a period of sluggish growth for the Swiss-based food giant. In the first half of fiscal 2025,
Nestlé reported 2.9% organic growth, driven primarily by price hikes rather than sales volume increases.
Real internal growth (RIG) – a key measure that tracks volume and product mix – rose only 0.2%, signaling weak consumer demand and ongoing volume pressures.
However, signs of recovery began to emerge by the third quarter, when Nestlé posted 4.3% organic sales growth, indicating modest improvement in performance.
Analysts suggest that Navratil’s swift moves to streamline operations and reinforce innovation could help strengthen the company’s competitive edge in an increasingly challenging global market.
As Nestlé undergoes this transformation, the coming months will test whether Navratil’s bold cost-cutting and growth strategies can deliver sustainable results – and restore the company’s reputation as a powerhouse in the global food industry.
Source: Fox Business
