In a sweeping move that has sent ripples through the global food industry, Nestlé, the world’s largest packaged-food company, announced on October 16, 2025, that it will cut 16,000 jobs worldwide over the next two years. The decision comes as part of a broader, intensified cost-cutting campaign aimed at reviving the Swiss giant’s financial performance amid a turbulent year marked by leadership shakeups and mounting economic headwinds.
Nestlé, the maker of household names like Nescafé, KitKat, and Nesquik, said the layoffs will affect both white-collar and manufacturing roles. According to statements reported by Fortune and Fox Business, 12,000 white-collar positions will be eliminated, many of which are expected to be automated as the company leans into digitalization and process simplification. An additional 4,000 jobs will be cut from manufacturing and supply chain operations, representing a total reduction of roughly 6% of the company’s global workforce.
“We are transforming how we work,” newly appointed CEO Philipp Navratil wrote in a LinkedIn post, echoing a message he’s shared in official company disclosures. “We are evolving and will simplify our organization and automate our processes.” Navratil, who took the helm in September 2025 after the abrupt departure of predecessor Laurent Freixe, faces the daunting task of steering Nestlé through a period of sluggish sales, volatile commodity costs, and shifting consumer preferences.
The company’s cost-cutting ambitions are nothing short of aggressive. Nestlé now aims to achieve 3 billion Swiss francs (about $3.76 billion) in savings by the end of 2027, up from an earlier target of 2.5 billion Swiss francs. This new goal, set by Navratil just a month into his tenure, signals a clear intent to accelerate the pace of change. “We will be rigorous in our approach to resource allocation, prioritizing the opportunities and businesses with the highest potential returns,” Navratil stated, as reported by Fox Business. He added, “The world is changing, and Nestlé needs to change faster. This will include making hard but necessary decisions to reduce headcount over the next two years… Along with other measures, we are working to substantially reduce our costs.”
The company expects these workforce reductions to deliver annual savings of 1 billion Swiss francs ($1.25 billion) by the end of 2026. While the cuts will be felt globally, a spokesperson told Fortune that “it will affect each market in a different way, and each market will prepare its own plan.” For now, Nestlé is not releasing further specifics about which countries or divisions will be most affected.
This wave of layoffs comes at a time when Nestlé is grappling with a host of external challenges. The company, based in Vevey, Switzerland, has been hit hard by rising commodity costs—especially coffee and cocoa. According to AP News, the price of cocoa soared to record highs in 2024 due to poor weather in major producing regions, and although prices have eased somewhat in 2025, they remain significantly higher than just two years ago. The company also faces steep tariffs imposed by the U.S. government, including a 50% tariff on Brazilian goods like coffee and orange juice, further squeezing margins in a market that relies heavily on imports.
These pressures have forced Nestlé and other food giants to raise prices over the summer, which in turn has contributed to softer consumer demand—particularly as shoppers increasingly turn away from processed foods. The company’s sales for the first nine months of 2025 fell 1.9% to approximately $82.8 billion compared to the same period in 2024, though organic sales, which exclude currency and acquisition effects, managed a 3.3% uptick. Real internal growth, a measure of volume and product mix, edged up just 0.2% in the first half of the year, highlighting the extent to which price hikes, rather than increased demand, have driven revenue growth. By the third quarter, however, Nestlé reported an improvement to 4.3% organic sales growth, suggesting that the turnaround efforts may be gaining some traction.
Leadership turmoil has only added to the company’s woes. In September, CEO Laurent Freixe was dismissed after an investigation revealed an undisclosed romantic relationship with a subordinate—an infraction that violated Nestlé’s code of business conduct. Freixe, who had served just one year in the role and was previously credited with shaping the company’s strategy, left without an exit package, according to Fox Business. His departure was quickly followed by the early resignation of Chairman Paul Bulcke, who had praised Navratil’s “impressive track record of achieving results in challenging environments” upon the new CEO’s appointment.
Navratil has wasted no time in outlining his vision for Nestlé’s future. “We are fostering a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded,” he stated in the recent announcement. He has emphasized the need for Nestlé to be “bolder in investing at scale” and to leverage innovation to spur growth and deliver value to shareholders. The company, he said, will focus on “transforming our ways of working, streamlining the organization and processes, and leveraging digitalization and automation.”
Market reaction to the news was swift and positive. Shares of Nestlé rose nearly 8% on the SIX Swiss Exchange following the announcement, and the company’s stock, which also trades over the counter in the U.S., jumped by a similar margin at the opening bell. Investors appear to be betting that the tough measures will help restore the company’s competitive edge and profitability.
The workforce reduction, while dramatic, is part of a broader trend in the consumer packaged goods sector, where automation and artificial intelligence are increasingly being deployed to boost efficiency and cut costs. Nestlé’s move to automate some white-collar roles underscores the extent to which even traditional office jobs are no longer immune to the march of technology. As a Nestlé spokesperson told Fortune, “This initiative is focused on transforming our ways of working, streamlining the organization and processes, and leveraging digitalization and automation.”
For employees, the coming months will bring uncertainty as individual markets prepare their own layoff plans. For the company as a whole, the challenge will be to execute these changes with minimal disruption to its sprawling global operations—and to win back consumers in an increasingly competitive and cost-conscious environment.
As Nestlé embarks on this new chapter under Navratil’s leadership, the stakes could hardly be higher. The company’s willingness to make tough, even painful decisions may well determine whether it remains at the forefront of the food industry or finds itself playing catch-up in the years to come.
