Global food giant Nestlé is undergoing a massive transformation, announcing 16,000 job cuts over two years, intensifying its cost-cutting efforts, and navigating a turbulent period marked by recent CEO and chairman dismissals, a bottled water scandal, and increasing commodity costs, all under the helm of new CEO Philipp Navratil.
In a move signaling a profound strategic shift, Nestlé SA, the world’s largest food and beverage company, announced plans to eliminate 16,000 jobs globally over the next two years. This sweeping reduction, amounting to approximately 6% of its workforce, is a cornerstone of an intensifying cost-cutting campaign aimed at reviving the company’s financial performance amidst a challenging global economic landscape and recent internal turmoil.
The Scale of the Cuts: Driving Efficiency Across the Board
The job reductions are not uniform, targeting various segments of the company’s operations. A significant portion, 12,000 positions, will come from white-collar roles across multiple locations. These cuts are projected to generate annual savings of 1 billion Swiss francs (approximately 1.25 billion USD) by the end of next year. Additionally, 4,000 jobs will be trimmed as part of ongoing productivity initiatives within Nestlé’s manufacturing and supply chain divisions.
This initiative accompanies an elevated cost-cutting target, now set at 3 billion Swiss francs (3.76 billion USD) by the end of next year, an increase from the previously planned 2.5 billion Swiss francs (3.13 billion USD). This aggressive target underscores the company’s commitment to streamlining operations and improving its financial health.
Turbulence at the Top: A Swift Leadership Refresh
The announcement of job cuts comes on the heels of a turbulent period for the Vevey, Switzerland-based company. Just last month, Nestlé dismissed its then-CEO, Laurent Freixe, following an investigation into an undisclosed relationship with a direct subordinate. Freixe had served in the top role for only a year before his abrupt departure.
His replacement is Philipp Navratil, a seasoned Nestlé executive who assumed the CEO role in early September. The leadership changes didn’t stop there; shortly after Freixe’s ousting, Chairman Paul Bulcke also stepped down earlier than scheduled, with Pablo Isla, former CEO of Inditex SA, taking his place. This swift and extensive leadership shuffle highlights the urgency with which Nestlé is addressing both internal governance issues and its broader strategic direction.
Navigating Economic Headwinds and Scandals
Beyond internal changes, Nestlé, like many other food manufacturers, is grappling with significant external challenges. These include rising commodity costs, particularly for key ingredients such as coffee and cocoa, and the negative impact of tariffs. In July, the company had already implemented price increases to offset some of these higher costs.
For instance, an Associated Press report detailed the imposition of tariffs on Brazilian goods, including coffee, which directly impacts Nestlé’s supply chain. The price of cocoa also reached record highs last year due to inclement weather, affecting chocolate producers globally before seeing a slight decline in 2025, as reported by AP News.
Furthermore, Nestlé has been dealing with other reputational pressures, including a bottled water scandal that emerged in France in 2024. These combined factors have placed immense pressure on the new leadership to stabilize operations and restore investor confidence.
Despite these challenges, the company’s recent financial figures showed some signs of resilience. For the first nine months of 2025, sales were down by 1.9% to 65.9 billion Swiss francs, yet organic sales growth stood at 3.3%, primarily driven by price increases of 2.8%. More positively, the announcement on jobs coincided with a stronger-than-expected 4.3% rise in third-quarter sales, a critical metric closely watched by analysts, which was driven by higher prices and improved real internal growth.
Philipp Navratil’s Vision: Faster Change and Strategic Focus
New CEO Philipp Navratil has articulated a clear vision for the company’s future. “The world is changing, and Nestlé needs to change faster,” Navratil stated, emphasizing the need for decisive action. He described the job cuts as “hard but necessary decisions to reduce headcount” aimed at streamlining operations in response to shifting market conditions and accelerating transformation.
Navratil, a Nestlé veteran with over 20 years of experience, including running the Nespresso business, has indicated that he will largely maintain the strategic direction initiated by his predecessor. This involves boosting advertising expenditure, focusing on fewer but larger product initiatives, and actively evaluating its portfolio for underperforming units, with potential divestments like struggling vitamin brands and finding a partner for its bottled water business already being considered.
His primary goal is to further increase real internal growth, indicating a strong focus on core business expansion and market share. Analysts have welcomed Navratil’s “ambition to foster a culture that does not accept losing market share and where winning is rewarded,” suggesting a more assertive approach to competition and growth.
The Broader Implications for a Global Giant
The substantial job cuts and strategic overhaul at Nestlé reflect a broader trend in the global consumer goods industry, where companies are continuously adapting to evolving consumer preferences, digital disruption, and economic volatility. For Nestlé, a company with over 2,000 brands in its portfolio, this transformation is critical for sustained relevance and profitability.
The market’s initial reaction was positive, with Nestlé shares rising nearly 8% on the SIX Swiss Exchange following the announcement. This suggests that investors view Navratil’s aggressive strategy, combining rigorous cost-cutting with a renewed focus on growth in high-margin and emerging segments, as a necessary and confidence-inspiring step toward securing the company’s future. The new era for Nestlé appears to be one of lean operations, strategic divestments, and a relentless pursuit of efficiency and growth.
