On October 16, 2025, Nestlé, the world’s largest food and beverage company, sent shockwaves through the global business community by announcing it would cut approximately 16,000 jobs over the next two years. The move, unveiled by newly appointed CEO Philipp Navratil, signals a dramatic acceleration of the Swiss giant’s cost-cutting strategy and a decisive shift in corporate culture after a turbulent year marked by leadership scandals and mounting investor pressure.
The cuts—amounting to nearly 6% of Nestlé’s global workforce of 277,000—will primarily hit white-collar professionals, with 12,000 office-based roles on the chopping block, while an additional 4,000 jobs will be lost in manufacturing and supply chain operations. The layoffs are part of a broader plan to streamline operations, simplify the organization, and ramp up automation and shared services across the company’s sprawling global footprint.
"We are fostering a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded," Navratil declared in a statement quoted by BBC News. "The world is changing, and Nestlé needs to change faster. This will include making hard but necessary decisions to reduce headcount." He echoed this sentiment on LinkedIn, writing, "We are transforming how we work. We are evolving and will simplify our organization and automate our processes." The company’s spokesperson, Chiara Valsangiacomo, told CNBC that the automation initiative is "much broader" than simply replacing roles with artificial intelligence, although Nestlé does employ AI in research, development, and promotional activities.
The announcement came alongside Nestlé’s third-quarter earnings report, which showed promising signs of recovery after a rocky period. Organic sales rose 4.3% in the third quarter of 2025, with real internal growth (RIG) returning to positive territory at 1.5%. Sales across major categories, including coffee and sweets, were up, and the company maintained its growth outlook for the year despite ongoing headwinds such as U.S. tariffs and volatile exchange rates. According to The New York Times, the company’s largest market remains North America, where consumers have grown increasingly anxious about inflation and tariffs but have continued to spend robustly.
Investors responded with enthusiasm: Nestlé’s share price jumped by more than 8% in Zurich and closed 9.3% higher, boosting the broader European food and beverage sector. As Morningstar equity analyst Diana Radu observed, the job cuts appear to be an effort to "reset expectations and rebuild investor confidence through measurable actions." Jon Cox, head of European consumer equities at Kepler Cheuvreux, told CNBC, "Overall, it is extremely positive and certainly looks operationally as if the company has turned the corner with the better performance while the management upheaval over the summer fades into the background."
That management upheaval has been substantial. In early September 2025, former CEO Laurent Freixe was abruptly fired after failing to disclose a romantic relationship with a direct subordinate, a clear breach of Nestlé’s code of conduct. The scandal prompted further turmoil: just two weeks later, longtime chairman Paul Bulcke stepped down under pressure from institutional investors dissatisfied with his handling of the situation. Bulcke was succeeded by Pablo Isla, the former chairman of Spanish apparel giant Inditex, who is expected to formally take the reins after Nestlé’s annual general meeting in April 2026.
Navratil, previously head of Nestlé’s Nespresso business, has wasted no time in stamping his authority on the company. He has pledged to "fully embrace the company’s strategic direction, as well as the action plan in place to drive Nestlé’s performance," vowing to "accelerate execution and to drive the value creation plan with intensity." The cost-saving program, which under Freixe targeted 2.5 billion Swiss francs in cuts by 2027, has now been ramped up to 3 billion francs (about $3.7 billion), according to The New York Times and CNBC. The layoffs alone are expected to save around 1 billion francs (approximately £940 million) annually.
Nestlé’s leadership insists that these cuts are not merely about slashing costs, but about refocusing the company on its most promising products and markets. "As Nestlé moves forward, we will be rigorous in our approach to resource allocation, prioritizing the opportunities and businesses with the highest potential return," Navratil said in a statement. The company’s new strategy of focusing on "winners" and turning around "losers" has already begun to yield results, with improved sales and a more positive outlook from analysts.
Yet, the human cost of such sweeping layoffs has not gone unnoticed. Unite, one of the UK’s largest trade unions, criticized the job cuts and vowed to respond robustly to any layoffs affecting British workers at Nestlé’s sites in York, Halifax, Dalston, and Tutbury, as well as at Buxton Water. "Nestlé is a profitable company, selling billions of produce every month. Job losses are simply unacceptable," said Sharon Graham, the union’s general secretary, as reported by BBC News.
The context for these changes is a rapidly evolving food industry landscape. Multinational consumer products companies like Nestlé are grappling with rising raw material costs—particularly for cocoa and coffee beans—a shift in consumer preferences away from processed foods, and increased competition from both established rivals and nimble newcomers. The company also faces specific challenges in China, where demand has dropped and business underperformed, negatively impacting overall growth by 80 basis points in the third quarter, according to CNBC. Meanwhile, U.S. tariffs, including a hefty 39% duty on Swiss goods, have added to the pressure.
Despite these challenges, Nestlé’s management and many analysts remain optimistic. The company reiterated its commitment to invest over the medium term, even as it pursues greater operational efficiency. Analysts at Vontobel praised Navratil’s "strong focus on resource allocation, innovation and a performance mind-set," noting that the renewed zeal appears to be "going in the right direction" after months of negative headlines.
Still, questions linger about the long-term impact of automation and AI on Nestlé’s workforce and the broader industry. The rise of artificial intelligence has fueled fears of widespread job losses in various sectors, and as CNN reported, even the CEO of leading AI lab Anthropic has warned that AI could cause a dramatic spike in unemployment. For now, Nestlé maintains that its automation push is about efficiency and competitiveness, not simply replacing people with machines.
For Navratil and his new chairman, Pablo Isla, the coming months will be a crucial test. Rebuilding trust with investors, navigating geopolitical and economic uncertainties, and steering the company through a period of profound change will require both boldness and sensitivity. As Deutsche Bank analysts noted, "Many long term investors … would have to hear more from someone who is relatively unknown to the market before becoming more positive." The world will be watching to see if Nestlé’s new leadership can deliver on its promise of renewal—without leaving too many behind.
