Nestle announced plans to slash approximately 16,000 positions in a sweeping restructuring effort spearheaded by newly appointed CEO Philipp Navratil, as the company intensifies efforts to restore growth and shareholder confidence.
The restructuring, which aims to enhance operational efficiency, will see about 12,000 white-collar roles eliminated, with a further reduction of 4,000 jobs slated to take place over the next two years, according to an official statement on Thursday. The company’s shares responded positively to the announcement, rising 7.8% in Thursday trading.
Nestle previously targeted cost savings of CHF 2.5 billion (USD 3.14 billion) under former CEO Laurent Freixe. That target has now been raised to CHF 3 billion, with completion expected by the end of 2027.
For the third quarter, Nestle posted an organic growth rate of 4.3%, outpacing analyst expectations. This comes as the company navigates headwinds such as US tariffs and soaring input costs for commodities like cocoa and coffee.
The company also reported that its Real Internal Growth (RIG) returned to positive territory, climbing 1.5% after a disappointing second quarter, a recovery attributed in part to increased investment and more favorable market comparisons.
HSBC analysts had earlier anticipated this rebound in RIG, citing a combination of easier comparative figures and benefits from management initiatives, as well as reduced sensitivity to price increases.
Despite the gains, Nestle’s Greater China operations remained a drag, weighing on organic growth by 80 basis points and RIG by 40 basis points. The company noted that a new management team is executing a business transformation plan.
Commenting on the overall outcome, Jon Cox, Kepler Chevreux’s head of European consumer equities, remarked that it is extremely positive operationally and suggests management turbulence earlier this year is receding into the background. He also expects to see a very positive stock reaction.
The Swiss food giant, headquartered in Vevey, has endured a challenging year, grappling with leadership turmoil and lagging behind competitors in both operational metrics and share performance. The company’s shares remain more than 40% below their December 2021 peak and have declined 9% over the past twelve months.
The firm faced an abrupt CEO transition after former chief Laurent Freixe was dismissed in September over an undisclosed relationship. Navratil, promoted from his position as Nespresso division CEO, has committed to accelerating the company’s existing strategy and enhancing execution to boost value creation.
Just weeks later, Nestle expedited the departure of Chairman Paul Bulcke following pressure from institutional investors concerned with his handling of the Freixe situation. Bulcke’s responsibilities passed to Pablo Isla, former CEO of Inditex, who had originally been slated to assume the chairman role after Nestle’s annual meeting in April 2026.
Analysts have observed that the new leadership must quickly restore confidence. In a September note, Deutsche Bank analysts commented that many long-term investors would need further clarity from the new leadership, who are still relatively unknown in the market before regaining optimism.
While immediate priorities will center on volume recovery—particularly in China—investors are also seeking clarity on the partial divestment of Nestle’s water business, plans for the underperforming vitamins segment, and the future of its 20% stake in L’Oreal.
