AMSTERDAM (FN) — Nestlé will cut 16,000 jobs globally as part of a sweeping cost-saving initiative under new Chief Executive Philipp Navratil, the company announced Thursday. The move represents 5.8% of its workforce and is aimed at restoring investor confidence and reversing sluggish sales.
Navratil said the company has raised its cost savings target to three billion Swiss francs by the end of 2027, up from a previous goal of two and a half billion. The cuts include 12,000 white-collar positions over the next two years and 4,000 roles in manufacturing and supply chain operations.
The announcement comes amid mounting pressure from rising costs, increased debt, and U.S. import tariffs, which have affected Swiss goods despite Nestlé’s largely domestic U.S. production. “The world is changing, and Nestlé needs to change faster,” Navratil said.
Nestlé’s shares jumped roughly 8% in early trading following the announcement. The company has faced internal upheaval in recent months, with Navratil replacing Laurent Freixe as CEO after Freixe was dismissed over an undisclosed relationship with a subordinate. Chairman Paul Bulcke also stepped down early, succeeded by former Inditex chief Pablo Isla.
Navratil emphasized that driving real internal growth—an indicator of sales volume—is his top priority. Nestlé reported a 1.5% increase in this metric for the third quarter, exceeding analyst expectations of 0.3%.
“We are fostering a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded,” Navratil said. Strategic reviews are underway for Nestlé’s waters and premium beverages division, as well as its low-growth vitamins and supplements brands.
Despite the restructuring, Nestlé maintained its 2025 financial guidance. The company expects organic sales growth to improve compared to 2024 and forecasts its underlying trading operating profit margin to reach or exceed 16%, with a medium-term goal of at least 17%.
The margin projections account for the 39% U.S. import tariffs on Swiss goods that took effect in August. Nestlé anticipates the bulk of its cost savings to materialize between 2026 and 2027, with 700 million francs expected in 2025.
Organic sales rose 4.3% in the third quarter, beating analyst estimates of 3.7%. Growth was driven by price increases in coffee and confectionery, though performance in Greater China lagged. Chief Financial Officer Anna Manz said the company is now focusing on building consumer demand rather than expanding distribution.
