With barely a month in the role, Nestlé CEO, Philipp Navratil, announced 5.8 per cent of the company’s employees would lose their job in the next two years, as the global food business looks to save $5.8 billion (CHF 3 billion) by the end of 2027.
(Image: Nestlé)
“The world is changing, and Nestlé needs to change faster. This will include making hard but necessary decisions to reduce headcount over the next two years. We will do this with respect and transparency,” Navratil said.
In response to questions regarding impacts on its Australian workforce, a spokesperson told Food & Drink Business said the reductions would apply to markets and functions globally.
“It will affect each market in a different way, and each market will prepare its own plan. At this stage, we are not in a position to give specific numbers,” they said.
The business has been attempting to turnaround its financial performance with little sales growth, growing costs, and its share price falling 40 per cent since 2022.
Previous CEO, Laurent Freixe (dismissed by the board with immediate effect and no exit package due to an undisclosed romantic relationship with a direct report colleague, after only 12 months in the role), announced significant changes a year ago, including restructuring the business, demerging waters and premium beverages, and greater digital transformation.
Navratil announced the increased savings target (from CHF 2.5 billion to CHF 3 billion) in the Q3 CY25 report.
“Driving RIG-led (real internal growth) growth is our number one priority. We have been stepping up investment to achieve this, and the results are starting to come through. Now we must do more and move faster to accelerate our growth momentum,” he said.
Q3 CY25 snapshot
China continued to “be a drag” on the company, impacting group organic growth by 80 basis points and RIG by 40 basis points. Navratil said new management is in place and executing the plan to transform the business.
The company is now carrying out a “step change” in consumer insights and marketing capabilities, while focusing on the six global “big bets” – beverages (including coffee), confectionery, Nestlé Professional, PetCare, Infant Nutrition, and Frozen Food.
“As Nestlé moves forward, we will be rigorous in our approach to resource allocation, prioritizing the opportunities and businesses with the highest potential returns.
“We will be bolder in investing at scale and driving innovation to deliver accelerated growth and value creation.
“We are fostering a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded,” Navratil said.
