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Nestle, the world’s largest packaged food company, will cut its workforce by 16,000 over the next two years as it looks to cut costs “substantially” under its new CEO Philipp Navratil.
In Thursday’s announcement, Navratil set a new target of achieving cost savings of Swiss francs 3 billion by the end of 2027, higher than the previous target.
“As Nestlé moves forward, we will be rigorous in our approach to resource allocation, prioritizing the opportunities and businesses with the highest potential returns,” Navratil said.
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The CEO, only a month into the job, said the company must “do more and move faster to accelerate its growth momentum.” To do this, Navratil says, Nestle wants to “be braver in investing at scale” and leverage innovation to drive growth and increase value.
Nestle CEO Philipp Navratil has set a new target to achieve cost savings of CHF 3 billion by the end of 2027. (Kevin Carter/Getty Images)
“We foster a culture that embraces a performance mentality, that does not accept loss of market share and where winning is rewarded,” he said, adding that the actions the company is taking, including reducing its workforce, will “secure Nestle’s future as a leader in our industry” while delivering shareholder value.
When Navratil took over, chairman Paul Bulcke praised “his impressive track record of delivering results in challenging environments.”
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Since the acquisition, Navratil has worked to put the company on a growth path following a turbulent year that saw former CEO Laurent Freixe ousted less than a year after his appointment due to an inappropriate working relationship.
Nestlé will reduce its workforce by 16,000 people over the next two years. (Justin Sullivan/Getty Images)
In September, Freixe, who was said to have played a central role in shaping the company’s strategy and portfolio, was fired following an investigation into a romantic relationship with a direct report that violated Nestlé’s code of business conduct. Freixe leaves the company without an exit package.
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Freixe’s resignation was the latest setback for a company whose former CEO, Ulf Mark Schneider, voluntarily resigned due to concerns about underperformance.
Nestle CEO Philipp Navratil said, just a month after taking office, that the company must “do more and act faster to accelerate its growth momentum.” (Stof Coffrini/AFP via / Getty Images)
The company had a sluggish first half of fiscal 2025 with organic growth of 2.9%, with most of that driven by price increases rather than higher sales volumes. Real internal growth (RIG), which measures volume and product mix, rose by just 0.2%, underscoring weak consumer demand and volume pressure.
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However, performance improved in the third quarter, with Nestlé achieving organic sales growth of 4.3%.
