Nestle shares up 7% as new CEO Navratil launches sweeping 16,000-job cuts

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Nestle’s shares jumped by over 7% on Thursday after the global consumer goods giant announced plans to cut 16,000 jobs worldwide as part of a bold restructuring drive under its new Chief Executive Officer, Philipp Navratil.

The job cuts - comprising 12,000 white-collar and 4,000 other roles - will be implemented over the next two years as the company intensifies efforts to streamline operations, boost efficiency, and restore profitability following a turbulent year marked by leadership changes and investor unease.

Nestle said the restructuring aims to deliver cost savings of up to 3 billion Swiss francs ($3.14 billion) by the end of 2027, expanding an earlier savings plan of 2.5 billion francs initiated under former CEO Laurent Freixe.

The announcement came as Nestle reported better-than-expected third-quarter results, with organic growth rising 4.3% and Real Internal Growth (RIG) up 1.5%, signalling a rebound after a weak second quarter.

“Our priority is to execute with speed and precision,” Navratil said in a statement. “We are rigorously reviewing our operations to focus resources on areas with the strongest growth and value creation potential.”

Nestle’s performance improvement was attributed to renewed investment in key brands such as Nespresso and KitKat, along with favourable market conditions. However, the company’s business in Greater China remained a drag, cutting organic growth by 80 basis points. Nestle said new management is in place to “transform the business” in that region.

Analysts welcomed the company’s decisive action. “Nestle appears to be turning the corner after months of turbulence,” said Jon Cox, Head of European Consumer Equities at Kepler Cheuvreux. “The market is rewarding clear leadership and renewed confidence in its strategy.”

The 2025 restructuring follows a challenging period for Nestle, CNBC reported. Freixe, the former CEO, was ousted in September over a personal scandal, prompting an accelerated leadership reshuffle. Paul Bulcke also stepped down early as Chairman, paving the way for Pablo Isla, former Inditex chief, to assume the role ahead of schedule.

Nestle shares, which had fallen more than 40% from their 2021 peak and 9% in the past year, surged on Thursday as investors viewed Navratil’s plan as a long-awaited reset for the 157-year-old company.

Analysts at Deutsche Bank noted that “Navratil must now prove himself to investors by delivering sustained volume recovery, turning around the China business, and resolving underperforming segments such as water and vitamins.”

Navratil assured shareholders that the company’s strategy would be rooted in efficiency and disciplined capital allocation. “We are determined to accelerate growth momentum and build a stronger, more agile Nestle,” he said.

Industry watchers say the restructuring marks one of Nestle’s most aggressive transformation efforts in decades — and a crucial test for its new leadership team as it seeks to rebuild trust and restore the company’s global dominance.

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