Nestlé, the world's largest packaged food company, has announced it will lay off 16,000 workers globally over the next two years.
The decision comes as new CEO Philipp Navratil pushes forward an aggressive plan to cut costs and boost growth after a challenging year for the company.
The layoffs will affect 12,000 white-collar jobs, with another 4,000 cuts across other departments.
The move is part of Nestlé's updated goal to save 3 billion Swiss francs (about $3.14 billion) by the end of 2027, up from its earlier savings target of 2.5 billion francs, CNBC reported.
"We are transforming how we work," Navratil said in a LinkedIn post. "We are evolving and will simplify our organization and automate our processes."
Nestlé has not yet shared exactly how automation will be used, but the company said the changes go beyond simply replacing jobs with AI.
Other large companies, especially in tech, have also turned to automation to cut costs, with over 17,000 job losses this year tied directly to artificial intelligence, according to recent reports.
Navratil, who took over as CEO just a month ago, said Nestlé needs to "do more and move faster" to keep up with competitors.
He stressed the company will focus on investing in areas with the highest potential and building a performance-driven culture. "Winning is rewarded," he said.
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Nestlé Shares Jump 9.3% After Layoff News
The layoffs follow a difficult period for Nestlé. Former CEO Laurent Freixe was removed in September after an internal investigation found he had violated company policy by engaging in a romantic relationship with a subordinate.
His predecessor, Ulf Mark Schneider, stepped down amid concerns over poor performance.
Despite leadership turmoil, Nestlé showed signs of recovery in the third quarter of 2025.
According to FoxBusiness, the company reported 4.3% organic growth, with real internal growth — which includes product mix and volume — up 1.5%. However, its China operations continue to struggle, pulling down overall results.
Shares of Nestlé rose 9.3% following the job cut announcement, lifting the broader European food and beverage sector.
Navratil, who previously led Nestlé's Nespresso unit, said his leadership will be focused on execution and value creation. "As Nestlé moves forward, we will be rigorous in our approach to resource allocation," he said.
The job cuts are expected to take place gradually through 2026 and 2027.
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