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Layoffs

Nestle's New CEO Unveils Cost-Cutting Measures to Revitalize the Company

Strategic Insights

— 2 min read

The new CEO of Nestle, Philipp Navratil, has outlined plans to cut 16,000 staff globally as part of a cost-saving drive aimed at revitalizing the world's largest consumer goods group. This move comes as part of a broader effort to save around CHF 3 billion by the end of 2027, an increase from the previous goal of CHF 2.5 billion. The workforce cuts represent nearly 6% of Nestle's global 277,000 headcount, with around 12,000 white-collar professionals and 4,000 in manufacturing and the supply chain being affected.

Key Takeaways:

  • Nestle's new CEO, Philipp Navratil, has announced plans to cut 16,000 staff globally as part of a cost-saving drive.
  • The workforce cuts represent nearly 6% of Nestle's global 277,000 headcount, with around 12,000 white-collar professionals and 4,000 in manufacturing and the supply chain being affected.
  • The cost-saving drive aims to save around CHF 3 billion by the end of 2027, an increase from the previous goal of CHF 2.5 billion.
  • Nestle has faced subdued consumer demand and underperformed against its rivals in Europe and the United States since the pandemic.
  • The company's sales volumes have been sluggish, and cost-of-living concerns have led consumers to trade down from branded goods to supermarket own-label products.
  • Nestle has reported a 3.3% increase in total group sales to CHF 65.9 billion in the first nine months of the year, on an organic basis.
  • The company's quarterly real internal growth (RIG) increased by 4.3%, beating expectations and driven by a strong performance at Nespresso.
  • Warren Ackerman, an analyst at Barclays, gave the update an 8.5 out of 10, while James Edwardes Jones, an analyst at RBC Capital Markets, welcomed Nestle's strategy to prioritize RIG-led growth.

Statistics:

  • CHF 3 billion: the amount Nestle aims to save through cost-cutting measures by the end of 2027.
  • 6%: the percentage of Nestle's global 277,000 headcount that will be cut.
  • 12,000: the number of white-collar professionals expected to be affected by the workforce cuts.
  • 4,000: the number of staff in manufacturing and the supply chain expected to be affected by the workforce cuts.
  • 9.3%: the increase in Nestle's shares to close at CHF 83.21 following the announcement.
  • 10%: the gain in Nestle's stock price this year.
  • 15.5%: the decline in sales of Nestle's frozen food division last year.
  • 3.3%: the increase in total group sales to CHF 65.9 billion in the first nine months of the year, on an organic basis.
  • 4.3%: the increase in quarterly real internal growth (RIG), beating expectations and driven by a strong performance at Nespresso.

Sources:

  • The article was published in The (date not specified).
  • Source: The article cites Warren Ackerman, an analyst at Barclays, and James Edwardes Jones, an analyst at RBC Capital Markets.
  • Source: The article mentions Nestle's sales and growth figures, including a 3.3% increase in total group sales to CHF 65.9 billion in the first nine months of the year, on an organic basis.

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