Nestlé said Thursday it plans to cut 16,000 jobs worldwide as new Chief Executive Philipp Navratil launches a sweeping restructuring effort aimed at restoring growth, rebuilding investor confidence, and streamlining operations at the world's largest food and beverage company. The announcement, coupled with stronger-than-expected quarterly results, sent Nestlé shares up more than 8% in early trading, boosting Europe's food and beverage sector.
The cuts-representing about 5.8% of the company's 277,000 employees-will include 12,000 white-collar roles and an additional 4,000 manufacturing and supply chain positions phased out over the next two years. "We are transforming how we work," Navratil wrote in a LinkedIn post accompanying the company's earnings release. "We are evolving and will simplify our organization and automate our processes."
Nestlé raised its cost-savings target to 3 billion Swiss francs ($3.14 billion) by 2027, up from 2.5 billion previously, as it seeks to offset higher raw material prices and U.S. import tariffs that have weighed on profitability. "The world is changing, and Nestlé needs to change faster," Navratil said Thursday, framing the layoffs as part of an efficiency push to "ignite a turnaround fire."
The company reported 4.3% organic sales growth in the third quarter, surpassing analyst expectations of 3.7%. Real Internal Growth (RIG)-a key measure of sales volume-rose 1.5% after two quarters of decline, signaling early signs of recovery in demand. "Nestlé's quarterly results add fuel to the turnaround fire," Bernstein analysts wrote, calling the scale of job cuts a "significant surprise."
Underpinning the results were solid performances in coffee and confectionery, particularly from brands such as Nespresso and KitKat, though weakness in Greater China remained a drag. The region reduced organic growth by 80 basis points and RIG by 40 basis points. Chief Financial Officer Anna Manz said Nestlé had been "too focused on driving distribution across China and not enough on building consumer demand," adding that the company is now consolidating its network "to make it more efficient, while we build this consumer demand."
Shares of the Vevey, Switzerland-based company have fallen roughly 40% since their December 2021 peak and 9% over the past year, as the firm battled rising costs and investor unease over management turmoil. Navratil, formerly the head of Nestlé's Nespresso division, took the helm in September after CEO Laurent Freixe was dismissed over an undisclosed personal relationship. Chairman Paul Bulcke also stepped down early, succeeded by former Inditex chief Pablo Isla under pressure from institutional shareholders.
Analysts said Navratil's early moves have begun to restore market confidence. "Overall, it is extremely positive and certainly looks operationally as if the company has turned the corner," said Jon Cox, head of European consumer equities at Kepler Chevreux. "The management upheaval over the summer fades into the background."
Navratil outlined a strategy focused on productivity, automation, and portfolio realignment. He emphasized that Nestlé would "prioritize the opportunities and businesses with the highest potential return," with ongoing reviews of its waters, premium beverages, and underperforming vitamins and supplements divisions. The company also maintained its 2025 guidance, projecting organic sales growth to improve from 2024 and an underlying trading operating profit margin at or above 16%, despite the impact of 39% U.S. import tariffs on Swiss goods.
Navratil said he aims to foster "a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded." Analysts at Deutsche Bank noted that long-term investors would likely need more visibility into Navratil's leadership but acknowledged that his decisive actions mark "a clear shift in tone and urgency."
Nestlé expects the bulk of its 3 billion francs in savings to materialize between 2026 and 2027, with around 700 million francs projected in 2025.
