Nestlé, the world’s largest food and beverage company, on October 16, 2025, announced that it will lay off 16,000 workers in two years. New Chief Executive Philipp Navratil described the move as needed to instill a “performance mindset,” streamline operations and focus on high-returning brands with more focused attention in the face of growing market pressures.
Strategic rationale behind the job cuts
Navratil, who arrived in early September following his predecessor’s removal over an unstated relationship, emphasized that Nestlé needs to “evolve more rapidly” to changing consumer tastes, rising commodity costs and external headwinds such as tariffs. The cost-reduction initiative is part of an overall agenda to raise savings targets from 2.5 billion Swiss francs to 3 billion Swiss francs by the end of 2027.
Breakdown of roles affected
Out of the 16,000 roles that will be cut, 12,000 are white-collar professional roles in functions and geographies, and 4,000 are manufacturing, logistics and supply-chain workers. The white-collar cuts will hit shared services and support functions, using automation and digital technology to drive efficiency.
Geographic distribution and local plans
Although Nestlé did not give granular breakdowns by region, it stated that each market will craft its own restructuring plan. North America and European operations—where Nestlé is seeing slow growth and increased tariff expenses—are likely to bear a disproportionate proportion of the reductions. Oceania and Africa, and Asia, which posted 2.7% organic growth in the first nine months of 2025, may see fewer cuts as Nestlé desires to keep momentum there.
The workforce reduction is estimated to save around 1 billion Swiss francs ($1.25 billion) annually by 2026, complementing the total 3-billion-franc target by 2027. Nestlé shares rose by approximately 7.5% immediately following the announcement, reflecting investor appreciation of tangible cost-saving initiatives.
Analyst and Trade Union reactions
Equity analysts greeted the move as a clear move to restore investor confidence after a period of management upheaval. AlphaValue’s Diana Radu described the cuts as “a clear sign that Navratil is resetting expectations and delivering on promised efficiencies”. European and North American labor unions, by contrast, have called for transparent criteria and generous redundancy packages, warning that poorly handled cuts risk damaging morale and brand reputation.
Support measures for impacted employees
Nestlé said it would offer comprehensive transition support, such as outplacement assistance, retraining programs and enhanced severance packages in accordance with local legislation. Nestlé will also redeploy qualified employees to growth businesses—such as premium coffee and pet care—where it is still investing heavily.
The step follows on the back of similar cost-reduction measures by other global food behemoths facing stagnant volume growth, shifting consumption patterns and mounting pressure from private equity firms. Kraft Heinz itself announced late last week the proposal to split the firm’s business to unlock shareholder value, and Unilever also is accelerating digitalization in a bid to reduce overheads.
Navigating the path forward
As Nestlé embarks on this change at scale, its ability to balance cost-cutting with continued investment in research and development will be paramount. The firm’s top-selling brands—Nescafé, KitKat and Maggi—remained core pillars, but Navratil has made clear that underperforming portfolios will be sold off or revamped. By building a performance culture and redirecting resources to high-growth categories, Nestlé is attempting to position itself for long-term competitiveness and returns to investors.
The decision to cut 16,000 jobs indicates the urgency with which Nestlé’s new management is tackling profitability concerns. Though sheer cost savings and a sharp strategic focus might please investors, the true test would be in executing these cuts with care and ensuring product innovation and organisational agility continue to drive growth. Maintaining morale, retaining institutional memory and clinging on to best talent will be key as Nestlé navigates this critical phase of its makeover.
