Food and beverage multinational Nestlé has announced plans to reduce its global workforce by 16,000 positions over the next two years. The move includes 12,000 office-based positions in management and administrative roles and 4,000 jobs in manufacturing, logistics, and supply chain operations.
The restructuring aims to streamline operations, improve profitability, and refocus investments on high-performing brands and products with greater growth potential. These include the company’s coffee, confectionery, and premium product lines. Nestlé will also complete strategic portfolio reviews of its water and premium beverage businesses, along with its vitamins and supplements segment, to determine future priorities.
Nestle’s decision follows growing pressure from investors as profits and growth have slowed in recent years. The company’s stock has dropped by about 35% since 2022, reflecting investor concerns about weak performance and rising costs. In 2024, sales growth rose by only 2.2%, the weakest in years, before improving slightly to 3.3% in the first nine months of 2025.
Reported net sales stood at 65.9 billion Swiss francs (approximately 70.96 billion euros) in the first nine months of 2025, representing a 1.9% decline from the same period in 2024 due to exchange rate fluctuations. Nestlé has also faced external cost pressures, including higher input prices and trade barriers such as the United States’ recent 39% import tariff on Swiss goods, which has further strained margins.
Despite these challenges, the company expects the restructuring to yield annual savings of about 1 billion Swiss francs and help reach an overall cost-saving target of 3 billion Swiss francs by the end of 2027.
Consumer analyst Chris Beckett of Quilter Cheviot described the move as part of Nestlé’s ongoing transformation effort, saying management has “grand ambitions to bring Nestlé back to where it has historically been,” but added that “for now, the company is a work in progress.”
Leadership Changes Add to Strategic Shift
The restructuring follows a turbulent period within Nestlé’s top management. Former CEO Laurent Freixe was dismissed in September after failing to disclose a romantic relationship with a subordinate, which violated the company’s code of conduct. Two weeks later, long-serving chairman Paul Bulcke stepped down earlier than scheduled, paving the way for former Inditex CEO Pablo Isla to take over as chairman.
Following Freixe’s exit, Philipp Navratil was appointed as the new CEO. Navratil has since initiated the restructuring process, emphasizing that Nestlé must “change faster” to stay competitive in an increasingly dynamic global market. He described his priority as building a “performance mindset” to regain market share and strengthen operational efficiency.
Strong Performance Despite Internal Upheaval
Despite management shakeups, Nestlé reported stronger-than-expected financial results for the first nine months of 2025. Organic sales growth improved across major product categories, driven by higher prices on key brands such as Nescafé coffee, KitKat chocolate, and Maggi cooking products.
In the third quarter of 2025, the company recorded a 1.5% increase in real internal growth, outperforming analyst projections of 0.3%. This uptick was seen as an early sign of recovery and growing investor confidence in the company’s turnaround efforts.
The restructuring announcement was met with a positive response from investors, as Nestlé’s stock rose more than 8% by midday on Thursday. Analysts believe the cost-cutting measures and renewed focus on high-margin categories could help Nestlé regain its competitive edge in the global consumer market.
Nestle reaffirmed its full-year guidance and projected stronger organic sales growth compared to 2024. Beckett noted that the company’s progress could signal a gradual return to form.
“Full-year guidance has been reaffirmed, so we should see ongoing sales growth improvement with an operating margin of 16% or higher,” Beckett said. “The shares trade at a discount to the wider sector, reflecting the turnaround story the business is on. A few more quarters like this one may complete that story and put the company back on a path of sustained high-quality growth.”
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