Nestlé Resets With 16,000 Cuts in The Offing

Swiss food-making giant Nestlé is working hard at a turnaround under new CEO Philipp Navratil, announcing 16,000 job cuts over two years. This will include 12,000 office roles and 4,000 in manufacturing, logistics, and supply. 

The aim is to streamline and double down on categories with better returns, those being coffee, confectionery, and premium lines, while finishing portfolio reviews of water, premium beverages, and vitamins/supplements. 

Nestle's stock is down about 35% since 2022. In 2024, sales grew just 2.2%, and reported net sales for the first nine months of 2025 slipped 1.9% to €70.96bn, based on FOREX drag, even as organic growth improved to 3.3%. 

External headwinds aren’t helping, with a 39% US tariff on Swiss goods squeezing margins. Management is targeting roughly CHF 1bn in annual savings from the restructuring, contributing to a larger CHF 3bn cost program by end-2027, and reaffirming full-year guidance with an operating margin of 16% or better. 

Leadership turbulence has been part of the story, with Laurent Freixe exiting in September over a conduct breach, Paul Bulcke stepping down early as chair, and ex-Inditex CEO Pablo Isla taking over.

What Does This Mean for Me?

The latest figures show green shoots of recovery. In Q3 2025, real internal growth rose 1.5% versus 0.3% expected, with stronger pricing in Nescafé, KitKat, and Maggi. Analysts contend that if Nestlé sustains mid-single-digit organic growth and executes on the CHF 3bn savings, the valuation gap to peers could narrow.