Nestle 3Q earnings; announces 16,000 job cuts
Jars of Nescafe instant coffee, part of food giant Nestle’s portfolio, sit on a supermarket shelf on September 2, 2025 in Encinitas, California, USA.
Mike Blake | Reuters
Nestle said Thursday it will cut 16,000 jobs as the firm’s new CEO, Philipp Navratil, tries to accelerate the recovery at the consumer goods giant.
In a bid to improve operational efficiency, the firm said it would cut 12,000 white-collar jobs and cut a further 4,000 roles over the next two years.
Shares opened up 6.4% on Thursday.
Nestle announced a cost-savings program worth 2.5 billion Swiss francs ($3.14 billion) under former CEO Laurent Freixe. This has been accelerated to CHF 3 billion by the end of 2027.
The company reported a better-than-expected organic growth rate of 4.3% in the third quarter as it struggled with an uncertain consumer outlook due to U.S. tariffs and rising prices for raw materials such as cocoa and coffee beans.
Notably, Real Internal Growth (RIG) returned to positive territory in the third quarter, up 0.6%, helped by the Nespresso and KitKat maker’s growth investments paying off and easier comparisons.
The RIG miss in the second quarter had led to a sharp underperformance of Nestle shares. Ahead of the results, analysts at HSBC expected RIG to return to positive territory “due to easier comparisons, increasing benefits from Nestle’s own actions and reduced elasticity effects from price increases.”
However, the company’s business in Greater China continued to underperform, with the region hurting organic growth by 80 basis points and RIG by 40 basis points. Nestle said “new management is now in office and is implementing a plan to transform the business.”
Jon Cox, head of consumer equities at Kepler Chevreux Europe, said the firm’s strategy of focusing on winners and turning around losers helped third-quarter sales be better than expected.
“Overall it’s extremely positive and operationally it certainly looks like the company has turned the corner with better performance, with the management change in the summer fading into the background,” Cox said, adding that he expects the stock to react very positively.
