- Nestlé to cut 16,000 jobs, accelerating cost savings to $3B by 2027.
- Q3 organic growth stronger than expected; RIG back to positive at 1.5%.
- New CEO Navratil prioritizes efficiency, high-return investments, and business turnaround.
Nestlé announced Thursday it will cut 16,000 jobs as part of a sweeping strategy to boost operational efficiency under new CEO Philipp Navratil. The restructuring includes 12,000 white-collar positions and 4,000 additional roles reduced over the next two years, signaling a decisive push to streamline the consumer goods giant.
Accelerated Cost-Cutting Amid Growth Challenges
The job cuts are part of an accelerated cost-savings plan now totaling 3 billion Swiss francs ($3.14 billion) by 2027, up from the 2.5 billion Swiss francs announced under former CEO Laurent Freixe. Nestlé’s stock rose 7.8% on the news, reflecting investor optimism about Navratil’s leadership.
Despite global pressures—including U.S. tariffs and rising commodity costs for cocoa and coffee—Nestlé posted a stronger-than-expected 4.3% organic growth in Q3. Real Internal Growth (RIG) also returned to positive territory, rising 1.5%, as growth investments and easier year-over-year comparisons drove improved results.
Leadership Shake-Up Fuels Strategic Focus
The company has experienced a turbulent year. Former CEO Freixe departed in September following a personal controversy, and Chairman Paul Bulcke stepped down earlier than planned. Navratil, formerly head of Nestlé’s Nespresso division, has vowed to accelerate execution and prioritize high-return business opportunities. Pablo Isla, former Inditex CEO, is set to succeed Bulcke as chairman in 2026, strengthening the leadership team.
Analysts say the new management must rebuild investor confidence while addressing underperformance in key markets, including Greater China, which weighed on organic growth by 80 basis points. Nestlé is also under scrutiny for its struggling water and vitamins units and its 20% stake in L’Oréal.
Looking Ahead: Recovery and Growth
Navratil emphasized the company’s rigorous approach to resource allocation and its focus on “winners” while turning around underperforming segments. Experts suggest this strategy could mark a pivotal moment for Nestlé as it navigates a challenging market environment.
“With new leadership in place, Nestlé appears to have turned the corner operationally,” said Jon Cox, head of European consumer equities at Kepler Chevreux. “The focus on efficiency and growth investments is paying off.”
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As Nestlé moves forward, investors will closely monitor volume growth, business divestitures, and updates on strategic stakes to gauge the company’s long-term performance.
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