Mumbai: Nestle, one of the world’s largest food and beverage companies, has announced plans to cut 16,000 jobs globally. The news comes just weeks after Philipp Navratil took over as the new Chief Executive Officer (CEO). The job cuts represent around 6 percent of Nestle’s total workforce, and will happen over the next two years.
Which Jobs Will Be Affected?
The layoffs will impact employees around the world, in all regions where Nestle operates. The company will reduce 12,000 white-collar jobs, which include office and management roles. Additionally, 4,000 job cuts are already underway in Nestle’s production and supply chain areas.
Why Is Nestle Cutting Jobs?
The job cuts are part of a larger plan to improve efficiency and cut costs. CEO Philipp Navratil said, “The world is changing, and Nestle needs to change faster.” By reducing the workforce, Nestle hopes to save 1 billion Swiss francs — twice as much as earlier savings goals. The company says the decision, though difficult, is necessary for its long-term growth and success.
Company’s Financial Performance and Strategy
Nestle recently shared its nine-month financial results, showing a 1.9 percent drop in total sales to 65.9 billion Swiss francs (about $83 billion). However, the company also reported a strong rise in prices and better performance in real internal growth — a key number watched by investors.
Nestle’s shares rose by 3.4 percent in premarket trading after the announcement. Still, the company’s performance this year has been slower than the Swiss stock market overall.
New CEO’s Vision for Nestle
Philipp Navratil, who joined Nestle in 2001, became CEO after former executive Laurent Freixe was removed following internal controversy. Navratil has promised to stick to Freixe’s earlier plans: spend more on advertising, focus on fewer but stronger product launches, and sell weak-performing units. He said Nestle’s main goal is to keep improving real internal growth, and that everything in the company’s portfolio is being reviewed.
