Food and beverage leader Nestlé has unveiled plans for a significant restructuring that will result in the elimination of 16,000 jobs worldwide over the next two years. This initiative includes a reduction of 12,000 positions in management and office roles, along with 4,000 jobs in manufacturing, logistics, and supply chain sectors.
Nestlé’s Restructuring Strategy
This workforce reduction is part of a broader strategy aimed at streamlining operations and reallocating investments towards high-performing brands. Nestlé plans to focus on products with considerable potential returns, particularly in coffee, confectionery, and premium items.
Financial Performance and Sales Growth
Currently, Nestlé is undertaking a strategic review of its portfolio, specifically examining its water, premium beverage, vitamins, and supplements segments. Despite facing mounting challenges, including a sharp decline in its share price—down approximately 35% since 2022—and weak sales growth of only 2.2% in 2024, the company is hopeful. Within the first nine months of the current year, sales growth improved to 3.3%.
- Reported net sales for the first nine months of 2025 stood at CHF 65.9 billion (€70.96 billion), marking a year-on-year decrease of 1.9%.
- The job cuts are projected to save the company around 1 billion Swiss francs annually.
- Nestlé has set a total cost-saving goal of 3 billion Swiss francs by the end of 2027.
Management Changes
Nestlé is currently navigating significant management changes. The former CEO, Laurent Freixe, was removed in September for breaching the company’s code of conduct. Shortly thereafter, Chairman Paul Bulcke left his position earlier than expected, leading to the appointment of former Inditex CEO Pablo Isla as his successor. Following these changes, Philipp Navratil was designated as the new CEO.
Under Navratil’s leadership, the company has initiated this restructuring, emphasizing the need for Nestlé to adapt more swiftly in a dynamic global market. He prioritizes fostering a performance-driven culture to maintain market share.
Market Response and Future Outlook
In spite of management fluctuations, Nestlé has reported stronger-than-anticipated financial results in 2025. The rise in organic sales is attributed to higher prices on staple items, including Nescafé coffee and KitKat chocolate. In the third quarter of 2025, the company experienced a 1.5% increase in internal growth, surpassing analyst projections of just 0.3%.
Following the announcement of the restructuring plans, Nestlé’s stock saw an increase of over 8%. The company remains optimistic about future prospects, with projections indicating stronger organic sales growth compared to 2024.
- Operating margin is expected to be 16% or better.
- Investor sentiment suggests a shift towards a turnaround narrative for Nestlé.
Ultimately, while the restructuring poses challenges, Nestlé is poised to enhance its operational efficiency and profitability. With continued focus on performance and strategic investments, the company aims to return to a trajectory of sustained growth.
