Nestle has announced plans to cut 16,000 jobs worldwide, as newly appointed CEO Philipp Navratil launches an aggressive cost-cutting strategy aimed at revitalizing the company’s performance and restoring investor confidence.
The layoffs, which account for 5.8% of Nestle’s global workforce of approximately 277,000 employees, form part of a broader restructuring initiative to streamline operations and boost profitability. Navratil stated that the company has raised its cost-saving target to 3 billion Swiss francs ($3.77 billion) by the end of 2027, up from a previous target of 2.5 billion francs.
Speaking on Thursday, Navratil acknowledged the mounting challenges facing global food manufacturers, including rising tariffs in the United States, changing consumer habits, and increased demand for healthier options. “The world is changing, and Nestle needs to change faster,” he said, underscoring his commitment to a performance-driven corporate culture.
Nestle, the world’s largest packaged food producer and maker of KitKat, Nespresso, and Maggi, has endured a turbulent management period in recent months. Navratil took over after the unexpected dismissal of former CEO Laurent Freixe in September over personal misconduct allegations. Soon after, Chairman Paul Bulcke stepped down, paving the way for former Inditex chief Pablo Isla to assume leadership.
As part of the overhaul, 12,000 white-collar positions will be eliminated over the next two years, while an additional 4,000 jobs will be cut across manufacturing and supply chain divisions. The move comes as Nestle battles stagnating sales, mounting debt, and persistent pressure from shareholders amid a slide in its share price.
Industry analysts described the headcount reduction as a “significant surprise.” Analysts at Bernstein wrote that Nestle’s latest quarterly results “add fuel to the turnaround fire,” highlighting a stronger-than-expected 1.5% rise in real internal growth (RIG) — a key measure of sales volume performance — compared to analyst projections of 0.3%.
Navratil said his top priority is to drive RIG-led growth and foster a “performance mindset” across the organization. “We are building a culture that rewards winning and does not accept losing market share,” he noted.
Nestle is also conducting strategic reviews of its waters, premium beverages, and low-growth supplement brands, as it focuses on high-performing categories.
The company reaffirmed its 2025 financial guidance, expecting organic sales growth to improve from 2024 and forecasting an operating profit margin of 16% or higher, excluding one-off expenses. In the medium term, the company expects margins to rise to at least 17%.
Nestle confirmed that its outlook factors in the 39% U.S. import tariffs on Swiss goods, which came into effect in August. The majority of the planned 3 billion Swiss francs in cost savings will be realized between 2026 and 2027, with approximately 700 million francs expected in 2025.
The company reported a 4.3% increase in organic sales in the latest quarter, exceeding expectations of 3.7%. Growth was primarily driven by strong performance in coffee and confectionery segments, while Greater China continued to lag.
Chief Financial Officer Anna Manz said Nestle had been “too focused on distribution” in China and would now consolidate operations to rebuild consumer demand. “We are correcting that by making our distribution more efficient and focusing on brand engagement,” she explained.
With Navratil at the helm, Nestle’s turnaround strategy reflects a clear message to investors — the company intends to regain its leadership momentum through decisive action, innovation, and financial discipline.
