Nestlé Stock Rises as New CEO Plans 16,000 Layoffs. The ‘World Is Changing.’

The move is one of CEO Philipp Navratil’s first big decisions as chief executive. (FABRICE COFFRINI/AFP via Getty Images)

Key Points

• Nestlé plans to lay off 16,000 workers over the next two years as part of an expanded cost-cutting effort.
• The company aims to save 3 billion Swiss francs by the end of 2027, an increase from its previous goal of 2.5 billion Swiss francs.
• Nestlé’s organic sales rose 4.3% in the third quarter from a year earlier, marking the fourth consecutive quarter of accelerating growth.

Nestlé , the Swiss food company, said it plans to lay off 16,000 workers over the next two years as part of an expanded cost-cutting effort.

The cuts include around 12,000 “white-collar professionals” across regions and a further 4,000 workers as part of manufacturing and supply chain productivity initiatives, the company said.

Nestlé began implementing a cost-savings plan last November, though it didn’t announce job cuts at the time. The company is now aiming to save CHF3 billion—around $3.8 billion—by the end of 2027, up from a previous goal of CHF2.5 billion.

Switzerland-traded shares jumped 7.5% Thursday, putting the stock on pace for its largest single-day gain since 2008, according to Dow Jones Market Data.

“The world is changing, and Nestlé needs to change faster,” said CEO Philipp Navratil in a statement. “This will include making hard but necessary decisions to reduce headcount over the next two years.”

The move is one of Navratil’s first big decisions as CEO. The 24-year Nestlé veteran took the helm unexpectedly last month after the company fired former CEO Laurent Freixe for having a secret romantic relationship with a subordinate.

Navratil, who previously led the Nestlé’s Nespresso business, said upon taking over that he would embrace the company’s existing strategic direction.

Nestlé also reported that organic sales rose 4.3% in the third quarter from a year earlier, the fourth consecutive quarter of accelerating growth. Wall Street forecasts net income, however, to decline for the second straight year in 2025.

Write to Nate Wolf at nate.wolf@barrons.com