ZURICH, SWITZERLAND: Global food giant Nestle announced on Thursday its plan to cut 16,000 jobs worldwide over the next two years, a move described by its new chief executive as “hard but necessary.” The news of the major restructuring sent the company’s share price soaring.
The job cuts, which represent about six percent of Nestle’s total staff, include 12,000 white-collar positions. This part of the plan is expected to save the company one billion Swiss francs ($1.26 billion). An additional 4,000 job cuts are already in progress within its production and supply chain divisions.
“The world is changing, and Nestle needs to change faster,” CEO Philipp Navratil, who took over in early September, said in a statement. Following the announcement, the company’s shares jumped more than eight percent in morning trading.
The decision comes as the company, which owns over 2,000 brands including KitKat, Nespresso, and Maggi, reported a 1.9 percent drop in nine-month sales to 65.9 billion Swiss francs ($83 billion). Mr. Navratil stated that Nestle is now increasing its overall savings target to three billion Swiss francs by the end of 2027.
The move is seen by analysts as an “offensive” strategy by the new CEO to restore stability to the group, which has faced challenges since 2022. The company has experienced a turbulent period, including the dismissal of its previous CEO and the early departure of its chairman, alongside a scandal surrounding its bottled water brands in France.
Despite the drop in headline sales, partly due to currency fluctuations, Nestle reported a 3.3 percent organic sales growth, driven by price increases. The company noted that coffee and confectionery were major contributors to this growth.
