Nestlé Q3 earnings: a summary
- Nestlé will cut 16,000 jobs under its Fuel for Growth plan
- Job cuts include 12,000 white collar roles and 4,000 others
- RIG rose 1.5% in Q3, beating analyst forecast of 0.3%
- CEO Navratil prioritises agility, innovation and return on investment
- Nestlé may sell low-performing assets and invest in bold acquisitions
Food and beverage giant Nestlé shocked employees and investors Thursday morning, when incoming CEO Philipp Navratil, announced the company is to cut 7% of its workforce.
The move to make the business more efficient is part of Nestlé’s Fuel for Growth cost savings programme, and will see 12,000 white collar roles and a further 4,000 unspecified roles, slashed.
Nestle currently employs around 277,000 people worldwide.
Better-than-expected sales growth
The move comes amidst better-than-expected sales growth for the multinational, though this is attributed to pricing-led upticks in coffee and confectionery, rather than overall growth across the company.
The Swiss multinational posted a 1.5% rise in real internal growth (RIG) in the third quarter. This is well above analyst expectations of a 0.3% rise. And though this might offer Navratil time to settle into the role, it begs the question, why is the company axing so many jobs?
Turbulent times for Nestlé
Navratil, the former head of Nespresso, replaced disgraced Laurent Freixe, who was sacked in September following an undisclosed relationship with a direct report.
Nestlé, the world’s largest CPG, is in the midst of an intense and extended period of disruption, with Chairman Paul Bulck the latest to fall victim.
On top of this, the maker of big-name brands including KitKat, Nespresso, and Shreddies, has been fighting to boost stalled sales growth and slumping share prices.
“Driving RIG-led growth is our number one priority,” said CEO Navratil in a statement. “We have been stepping up investment to achieve this, and the results are starting to come through.”
He went on to say that now Nestlé “must do more and move faster” to accelerate growth momentum.
Presumably the cutting of 16,000 jobs is the “more”.
He also hinted at potential portfolio spin-offs, saying the company would be “rigorous” in its approach to resource allocation, prioritising the “opportunities and businesses with the highest potential returns”.
Meanwhile brand buy-ups also appear to be on the cards with the new head saying Nestlé will be “bolder in investing at scale and driving innovation to deliver accelerated growth and value creation”.
Nestlé‘s future
As Nestlé embarks on one of the most aggressive restructurings in its recent history, the company finds itself at a crossroads. The decision to cut 16,000 jobs, despite outperforming sales expectations, signals a deeper strategic pivot under Navratil’s leadership, one that prioritises agility, innovation, and return on investment over legacy structures.
While the immediate impact will be felt most acutely by employees, investors and analysts will be watching closely to see whether these bold moves translate into sustained growth and shareholder value.
With potential divestitures and acquisitions on the horizon, and a renewed focus on high-performing categories, Nestlé’s transformation could reshape not only its own future, but also the competitive landscape of global food and beverage.
Will this gamble pay off? Only time will tell – and we’ll be here to cover it.
