Nestlé SA plans to cut 16,000 jobs as new Chief Executive Officer Philipp Navratil seeks to accelerate a turnaround at the Swiss foodmaker.
The reductions, which would amount to about 6 per cent of the workforce, will be made over the next two years, the maker of Nespresso coffee capsules and KitKat candy bars said Thursday.
“The world is changing, and Nestlé needs to change faster,” Navratil said in a statement Thursday. “This will include making hard but necessary decisions to reduce headcount over the next two years.”
The company also raised its target for cost savings to 3 billion Swiss francs ($3.7 billion) by the end of 2027, from a previous goal of 2.5 billion francs. The announcement comes as the company reported stronger-than-expected third quarter sales on higher prices and volumes.
Nestlé tapped company insider Navratil as CEO last month after ousting his predecessor, Laurent Freixe, a year into his tenure for allegedly hiding a romantic relationship with a subordinate. In the wake of the scandal, Chairman Paul Bulcke stepped down earlier than scheduled, replaced by former Inditex SA CEO Pablo Isla.
The shuffle created turmoil at the top of a company known for its staid corporate culture, and left the new leadership duo with the task of presenting a plan to revive volume growth and tackle governance issues.
While Navratil, a Nestlé veteran of more than 20 years who most recently ran the Nespresso business, has indicated he’ll maintain Freixe’s strategy, investors will be attuned to any further clues about his plans.