Nestle Announces 16,000 Job Cuts in Restructuring plan
JAKARTA – food and beverage giant Nestle will reduce its global workforce by approximately 16,000 employees, representing 5.8% of its 277,000-strong workforce, as part of a cost-cutting initiative and effort to bolster investor confidence. The announcement comes amid significant leadership changes within the company.
Newly appointed CEO Philipp Navratil announced the restructuring plan, raising the company’s cost savings target to 3 billion Swiss francs (US$3.77 billion) by 2027, an increase from the previous target of 2.5 billion Swiss francs. The cuts are intended to streamline operations and adapt to evolving consumer preferences, including a growing demand for healthier food options.
“The world is changing and nestle needs rapid change,” Navratil stated, according to Reuters, on October 17, 2024.
The restructuring follows the recent departure of former CEO Laurent Freixe in September, citing personal reasons, and the early resignation of Board Chairman Paul Bulcke two weeks later, replaced by former Inditex chairman Pablo Isla.
Nestle anticipates organic sales growth will accelerate in 2025 compared to 2024, and projects a basic trading operating profit margin exceeding 16% and 17% in the medium term. The company’s margin projections factor in the impact of a 39% import tariff on Swiss goods entering the US, implemented in August. Approximately 700 million Swiss francs in cost savings are expected in 2025,with the majority of the 3 billion Swiss francs in savings realized between 2026 and 2027.
(rea/rrd)