**Nestlé to Cut 16,000 Jobs as New CEO Philipp Navratil Pushes for Cost Savings and Growth**

Nestlé announced on Thursday that it will cut 16,000 jobs as part of a broader strategy to reduce costs and regain investor confidence. The world’s largest packaged food company’s workforce will shrink by 5.8%, with the cuts affecting approximately 277,000 employees globally.

New CEO Philipp Navratil revealed that Nestlé has increased its cost-saving target from 2.5 billion to 3 billion Swiss francs (around $3.77 billion) by the end of 2027. Despite the bulk of Nestlé’s US sales being locally manufactured, rising US import tariffs remain a significant headwind. The food industry, in general, faces challenges such as fragile consumer confidence and shifting eating habits, with an increasing preference for healthier options.

> “The world is changing, and Nestlé needs to change faster,” Navratil stated.

Nestlé’s shares jumped nearly 8% in early trading following the announcement. The company has recently experienced managerial upheaval, with Navratil stepping in after former CEO Laurent Freixe was dismissed in September over an undisclosed relationship with a direct report. Shortly thereafter, long-time Chairman Paul Bulcke stepped down to be replaced by former Inditex chief Pablo Isla.

### Details of Job Cuts and Efficiency Drive

Navratil detailed that the 16,000 job reductions would include 12,000 white-collar positions over the next two years. An additional 4,000 job cuts are part of ongoing initiatives to streamline manufacturing and supply chain operations, all aimed at improving efficiency.

### Facing Market Challenges and Investor Pressure

Nestlé, known for iconic products such as KitKat, Nespresso, and Maggi, has been grappling with stalled sales growth and a falling share price amid rising costs and increasing debt levels. US import tariffs and shifting consumer preferences add to the company’s challenges.

Bernstein analysts described Nestlé’s quarterly results as adding “fuel to the turnaround fire,” labeling the job cuts a “significant surprise.” However, a 1.5% increase in real internal growth (RIG)—a measure of sales volumes—in the third quarter, well above the expected 0.3%, provides Navratil some breathing space as he begins to implement his strategy.

> “Driving RIG-led growth is our highest priority,” Navratil said. “We are fostering a culture that embraces a performance mindset, does not accept losing market share, and where winning is rewarded.”

### Ongoing Strategic Reviews and Outlook

Nestlé is currently conducting strategic reviews of its waters and premium beverages businesses, as well as its low-growth, low-margin vitamins and supplements brands.

The company maintained its 2025 guidance, expecting organic sales growth to improve compared to 2024. It forecasts an underlying trading operating profit margin at or above 16%, excluding certain non-recurrent expenses, with a medium-term target of at least 17%. These margin forecasts account for the new 39% US import tariffs on Swiss goods that took effect in August.

Most of the targeted 3 billion Swiss francs in cost savings are expected to materialize in 2026 and 2027, with 700 million Swiss francs anticipated in 2025.

### Quarterly Performance and Focus on China

Organic sales, which exclude currency movements and acquisitions, rose 4.3% in the latest quarter, surpassing analysts’ expectations of 3.7%. This growth was driven primarily by pricing increases in coffee and confectionery categories. However, Greater China remains a challenge.

CFO Anna Manz acknowledged that Nestlé had previously focused too much on expanding distribution in China, without sufficient attention to building consumer demand.

> “What you see in China now is us correcting that — consolidating our distribution to make it more efficient, while we build consumer demand,” Manz explained.

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**Currency Note:** $1 = 0.7955 Swiss francs.
https://nypost.com/2025/10/16/business/nestle-slashing-16k-jobs-in-massive-restructuring-after-ceo-turmoil/