Nestlé to eliminate 16,000 positions in effort to reduce costs.
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Nestlé to eliminate 16,000 positions in effort to reduce costs.

Nestlé, the Swiss multinational food and beverage company known for its extensive portfolio that includes brands like Nescafé, KitKat, and various pet foods, has announced a significant reduction in its global workforce. The company plans to eliminate approximately 16,000 jobs over the next two years as part of an aggressive strategy to cut costs and enhance its financial performance.

In an announcement made Thursday, Nestlé revealed its intent to increase targeted cost reductions from a previous estimate of 2.5 billion Swiss francs (approximately .13 billion) to a new target of 3 billion Swiss francs (around .76 billion) by the end of 2026. This decision comes during a challenging period for the company, which is headquartered in Vevey, Switzerland.

The restructuring follows a tumultuous month for Nestlé, which saw the abrupt dismissal of its CEO, Laurent Freixe, after an investigation into an undisclosed inappropriate relationship with a subordinate. Freixe’s tenure lasted just one year, and he has been succeeded by Philipp Navratil, a seasoned executive within the company. Additionally, the chairman of the board, Paul Bulcke, announced his early resignation shortly after Freixe’s ousting, indicating potential leadership instability at the top of the organization.

Nestlé is also grappling with a series of external challenges that have affected several food manufacturers worldwide. These include rising commodity costs and tariffs imposed by the U.S. government on imported goods. During the summer, the company implemented price increases to counteract soaring prices for essential ingredients such as coffee and cocoa. Recent tariffs levied by the Trump administration on Brazilian imports have compounded these issues, as Brazil supplies a significant portion of the coffee consumed in the United States.

The price of cocoa, a key ingredient in many of Nestlé’s products, reached unprecedented levels last year due to supply constraints caused by unfavorable weather conditions in cocoa-producing regions. While prices have shown signs of stabilization, they remain significantly higher than two years ago.

The job cuts announced by Nestlé will predominantly affect white-collar positions, with 12,000 roles being eliminated across various locations. The company anticipates that these layoffs will generate annual savings of 1 billion Swiss francs (roughly .25 billion) by the end of 2026. Additionally, 4,000 jobs are expected to be cut in the manufacturing and supply chain sectors as part of ongoing productivity initiatives.

Following the announcement, shares of Nestlé experienced a notable uptick, climbing nearly 8% on the SIX Swiss Exchange, reflecting investor optimism regarding the company’s restructuring efforts. Nestlé’s military strategic challenges underscore the need for rapid adaptation within the evolving global business landscape.

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