Nestlé announced that it will be reducing its workforce by 16,000 positions worldwide over the next two years as part of its strategy to cut costs and improve financial performance. The Swiss food giant, known for products like Nescafé and Purina pet food, revealed this decision on Thursday. Additionally, the company is increasing its targeted cost reductions to 3 billion Swiss francs ($3.76 billion) by the end of next year, up from the previously planned 2.5 billion Swiss francs ($3.13 billion).
This announcement comes during a challenging year for Nestlé, headquartered in Vevey, Switzerland. Last month, the company terminated CEO Laurent Freixe following an investigation into an undisclosed relationship with a subordinate, just a year after he took the role. He has been succeeded by Philipp Navratil, a veteran executive at Nestlé. Shortly after Freixe’s departure, Chairman Paul Bulcke also stepped down.
Like many food manufacturers, Nestlé is facing external challenges, including rising commodity prices and the adverse effects of tariffs. In July, the company indicated that it managed to offset increased costs for coffee and cocoa through price hikes.
On Thursday, Nestlé specified that it will eliminate 12,000 white-collar jobs across various locations, aiming for annual savings of 1 billion Swiss francs ($1.25 billion) by the end of next year. Additionally, 4,000 jobs will be cut as part of ongoing productivity improvements in its manufacturing and supply chain. “The world is changing, and Nestlé needs to change faster,” Navratil stated. Following the announcement, Nestlé’s shares rose nearly 8% on the SIX Swiss Exchange.