New CEO Philipp Navratil Seeks to Restore Investor Confidence and Accelerate Change
Vevey, Switzerland: Nestlé, the world’s largest packaged food company, is embarking on a dramatic restructuring under its new CEO, Philipp Navratil, who announced plans today to cut 16,000 jobs—approximately 5.8% of its global workforce—in a push to reduce costs and boost efficiency.
The cuts come as Navratil, who took the helm following a period of unprecedented managerial turmoil, seeks to reignite investor confidence.
“The world is changing, and Nestlé needs to change faster,” Navratil stated.
Restructuring and Financial Targets
The newly announced job cuts include 12,000 white-collar roles over the next two years, with an additional 4,000 reductions planned across manufacturing and the supply chain as part of ongoing efficiency initiatives.
Simultaneously, Nestlé has raised its cost savings target by 20% to 3 billion Swiss francs ($3.77 billion) from the previous 2.5 billion francs, to be achieved by the end of 2027. Most of these savings are projected to materialize in 2026-2027.
The Swiss maker of KitKat, Nespresso, and Maggi has faced significant headwinds, including US import tariffs (raised to 39% on Swiss goods in August), rising costs, climbing debt levels, and fragile consumer confidence.
Positive Sales Signal Offers Breathing Room
Despite the challenges, the company’s third-quarter performance provided a glimmer of hope for the new leadership.
- Real Internal Growth (RIG)—a key measure of sales volumes—rose by 1.5%, significantly exceeding analysts’ expectations of a 0.3% rise.
- Organic Sales (excluding currency and acquisition impacts) rose 4.3%, surpassing the 3.7% market estimate.
This sales growth, driven primarily by pricing increases in coffee and confectionery, was deemed “significant surprise” by Bernstein analysts, who noted that the positive results “add fuel to the turnaround fire.”
Navratil emphasized that driving RIG-led growth is Nestlé’s highest priority. “We are fostering a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded,” he affirmed.
Strategic Reviews and China Focus
Navratil confirmed that strategic reviews are ongoing for Nestlé’s waters and premium beverages business, as well as low-growth, low-margin vitamins and supplements brands.
Chief Financial Officer Anna Manz specifically addressed the drag from Greater China, admitting the company was previously too focused on distribution rather than building consumer demand. She stated that the current strategy is correcting this by consolidating distribution and making it more efficient while actively stimulating consumer interest.
Nestlé leaves its 2025 guidance unchanged, predicting organic sales growth will improve compared to 2024 and maintaining its forecast for the underlying trading operating profit margin at, or above, 16% for 2025, rising to at least 17% in the medium term.
