Nestlé will cut 16,000 jobs over the next two years as its new boss looks to accelerate a turnaround at the Swiss food giant.
The cuts amount to around 6% of the total workforce and come as Nestlé raises its cost saving target to CHF3bn (£2.8bn) by the end of 2027, up from CHF2.5bn before.
“The world is changing, and Nestlé needs to change faster,” said CEO Philipp Navratil. “This will include making hard but necessary decisions to reduce headcount over the next two years.”
The layoffs will include 12,000 “white-collar jobs” which will save the company CHF1bn – double what was previously planned – as well as 4,000 cuts in production and the supply chain as part of ongoing restructuring.
The world’s largest food company has consistently underperformed its rivals in the wider consumer goods sector over recent years having struggled to grow sales.
In its latest results this week, sales fell 1.9% to CHF65.9bn (£61.7bn) in the nine months, although this was largely due to unfavourable exchange rates.
The maker of Kit Kats and Nespresso delivered a 0.6% rise in real internal growth (RIG) – a measure of sales volumes – while prices went up 2.8%. Coffee and confectionery were the largest growth contributors due to double-digit price increases in some markets.
Navratil said “driving RIG-led growth is our number one priority.”
He added: “We have been stepping up investment to achieve this, and the results are starting to come through. Now we must do more and move faster to accelerate our growth momentum.”
Nestlé is expecting organic sales growth to improve compared with last year, although it said the comparison would be tougher in Q4.
Navratil took over as CEO in September after his predecessor, Laurent Freixe, was sacked for hiding a romantic relationship with a colleague. Nestlé chairman Paul Bulcke stepped down soon after.
At the time, Bernstein analyst Callum Elliott said the news was the latest in a line of “disappointing developments”.
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