By Obinna Uballa
Nestle shares surged more than 7% on Thursday after the global consumer goods giant announced plans to slash 16,000 jobs worldwide as part of a sweeping cost-cutting and restructuring drive under its new Chief Executive Officer, Philipp Navratil.
The Swiss-based maker of Nescafé, KitKat and Maggi said the cuts, comprising 12,000 white-collar roles and an additional 4,000 positions across other units, will be implemented over the next two years in a bid to improve operational efficiency and restore investor confidence.
The announcement came alongside better-than-expected third-quarter results, with organic growth rising 4.3% and Real Internal Growth (RIG) climbing 1.5%, marking a rebound from a weak second quarter.
Nestle also raised its ongoing cost-savings target from 2.5 billion to 3 billion Swiss francs ($3.14 billion) by the end of 2027, signalling a sharper focus on profitability, CNBC reported.
Navratil, who previously led Nestle’s Nespresso business and succeeded Laurent Freixe following his controversial ouster in September, said the restructuring marks “a new phase of accelerated execution” aimed at “driving value creation with intensity.”
“We must do more and move faster to accelerate our growth momentum,” Navratil said. “Nestle will be rigorous in its approach to resource allocation, prioritising opportunities and businesses with the highest potential return.”
Despite the upbeat earnings, Nestle’s Greater China operations remained a drag, shaving 80 basis points off organic growth. The company said a new management team was in place and was executing plans to revive the business.
Market analysts reacted positively to the latest moves. Jon Cox, Head of European Consumer Equities at Kepler Cheuvreux, described the results as “extremely positive,” noting that Nestle “appears to have turned the corner operationally.”
“This performance, coupled with leadership stability, should reassure investors after a turbulent year,” Cox added, according CNBC.
The turbulence began in September when Freixe was forced out over an undisclosed romantic relationship, followed weeks later by the early resignation of Chairman Paul Bulcke amid shareholder pressure. Bulcke’s successor, Pablo Isla – the former Inditex CEO – is expected to formally take over after Nestle’s 2026 AGM.
Nestle’s shares, which had dropped more than 40% from their 2021 peak and 9% over the past year, rallied sharply after Thursday’s announcement as investors welcomed signs of renewed discipline and focus.
Analysts say Navratil and Isla now face the task of restoring long-term investor trust while steering the company through strategic decisions, including the partial sale of its water business, a review of its vitamins unit, and the future of its 20% stake in L’Oréal.
