Nestle to cut 16,000 jobs worldwide by 2027
What's the story
Nestle, the world's largest packaged food company, has announced plans to cut 16,000 jobs over the next two years. The decision comes from new CEO Philipp Navratil as part of a strategy to boost sales volumes. The move comes despite the company reporting better-than-expected sales growth in its third-quarter results. The growth was largely driven by price increases in coffee and confectionery products.
Leadership changes
Major leadership changes at Nestle
Navratil, who previously led Nespresso, took over from Laurent Freixe. Freixe was fired last month over an undisclosed relationship with a direct reporting employee. The company has also witnessed other major leadership changes in recent weeks. Chairman Paul Bulcke stepped down early to make way for former Inditex chief Pablo Isla two weeks later.
Growth strategy
Nestle's 3rd-quarter results
Nestle's third-quarter results showed a 1.5% rise in real internal growth (RIG), a measure of sales volumes. This was well above analysts' expectations of a 0.3% rise. As part of its efficiency drive, the company plans to cut 12,000 white-collar jobs and reduce headcount by another 4,000 as part of ongoing manufacturing and supply chain initiatives.
Figures
Cost savings target increased
Nestle has also increased its cost savings target to 3 billion Swiss francs ($3.29 billion) from 2.5 billion francs by the end of 2027. "We are fostering a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded," Navratil said in a statement. "The world is changing, and Nestle needs to change faster," he added.