Nestlé announced plans to eliminate 16,000 jobs as part of a strategic turnaround under its new CEO, Philipp Navratil. The restructuring effort aims to enhance operational efficiency, involving the reduction of 12,000 white-collar positions and an additional 4,000 roles to be phased out over the next two years. Following the announcement, Nestlé’s stock saw a significant rise, trading nearly 9% higher, which also lifted the broader European food and beverage sector by over 3.3%.
This job reduction initiative is part of a wider cost-savings program that has scaled up from a previously announced 2.5 billion Swiss francs ($3.14 billion) to 3 billion Swiss francs by 2027. In the third quarter, Nestlé reported better-than-expected organic growth of 4.3%, indicating a positive response to efforts amid challenges such as rising raw material costs and uncertainty in consumer behavior, particularly due to U.S. tariffs.
A noteworthy highlight from the third quarter is the return to positive Real Internal Growth (RIG), which increased to 1.5%. This improvement comes after a disappointing performance in the second quarter. Analysts had anticipated this rebound due to easing year-over-year comparisons and the impact of Nestlé’s strategic initiatives, although the company’s performance in Greater China remained a weak point, negatively affecting overall organic growth.
With leadership changes now settling and an actionable plan in place, Nestlé appears to be navigating toward a more positive trajectory. Jon Cox, head of European consumer equities at Kepler Cheuvreux, remarked that the latest results suggest the company may indeed have turned a corner operationally. Despite the challenges over the past year, including a significant drop of more than 40% in shares since December 2021, the outlook remains cautiously optimistic as Nestlé works to reinforce its position in the market.