🔗 Share this article

Corporate Image

Global consumer goods leader Nestlé announced it will cut 16,000 positions during the upcoming biennium, as the recently appointed chief executive Philipp Navratil drives a strategy to concentrate on products offering the “greatest profit margins”.

The Swiss company has to “change faster” to remain competitive in a dynamic global environment and embrace a “achievement-focused approach” that refuses to tolerate declining competitive position, said Mr Navratil.

He replaced former CEO Laurent Freixe, who was terminated in September.

The job cuts were disclosed on Thursday as Nestlé announced stronger performance metrics for the initial three quarters of the current year, with expanded revenue across its major categories, such as beverages and confectionery.

The biggest food & beverage firm, Nestlé owns hundreds of brands, among them its coffee, chocolate, and food brands.

The company aims to remove 12,000 professional roles on top of four thousand further jobs throughout the organization over the coming 24 months, it stated officially.

The workforce reduction will cut costs by the consumer goods leader around 1bn SFr (£940m) annually as a component of an ongoing cost-savings effort, it said.

Its equity price increased by more than seven percent shortly after its performance report and job cuts were announced.

The CEO said: “We are cultivating a organizational ethos that adopts a performance mindset, that refuses to tolerate losing market share, and where achievement is incentivized... Global dynamics are shifting, and Nestlé needs to change faster.”

The restructuring would encompass “tough but required choices to cut staff numbers,” he added.

Financial expert an industry specialist stated the report indicated that Mr Navratil aims to “bring greater transparency to aspects that were formerly less clear in the company's efficiency strategy.”

The job cuts, she noted, appear to be an attempt to “adjust outlooks and rebuild investor confidence through tangible steps.”

The former CEO was dismissed by Nestlé in early September subsequent to an inquiry into whistleblower allegations that he omitted to reveal a romantic relationship with a direct subordinate.

Its departing chairman Paul Bulcke brought forward his leaving schedule and left his post in the identical period.

It was reported at the time that investors held accountable Mr Bulcke for the corporation's persistent issues.

In the prior year, an investigation discovered Nestlé baby food products sold in emerging markets included excessive amounts of sugar.

The analysis, conducted by non-profit organizations, determined that in many cases, the same products available in affluent markets had no extra sugars.

• The corporation operates numerous brands worldwide.
• Workforce reductions will impact sixteen thousand employees over the next two years.
• Savings are estimated to total CHF 1 billion each year.
• Share price rose 7.5% post the update.