Nestle stock soars 7% as new CEO unveils plan to cut 16,000 jobs, boost efficiency

Nestle shares jumped more than 7% on Thursday after the world’s largest food company announced a sweeping plan to eliminate 16,000 jobs globally as part of an ambitious restructuring drive led by new Chief Executive Officer Philipp Navratil.

The Vevey, Switzerland-based company said the move, which includes cutting 12,000 white-collar jobs and 4,000 additional positions, aims to streamline operations, reduce costs, and accelerate growth over the next two years, CNBC reported.

Nestle also expanded its ongoing cost-saving target to 3 billion Swiss francs ($3.14 billion) by 2027, up from an earlier projection of 2.5 billion francs, as it seeks to improve profitability and regain investor confidence.

The announcement followed better-than-expected third-quarter results, with organic growth rising 4.3% and Real Internal Growth (RIG) improving 1.5%, marking a turnaround after weak performance in the previous quarter.

“Our focus is to accelerate execution and drive performance with greater intensity,” Navratil said in a statement. “We must do more and move faster to sustain growth momentum while allocating resources to areas with the highest returns.”

Under Navratil’s predecessor, Laurent Freixe, Nestle had faced pressure from investors over slow volume growth and underperformance relative to peers. Freixe was forced to resign in September over an internal scandal, triggering leadership changes that included the early exit of Chairman Paul Bulcke.

Despite the encouraging earnings, Nestle’s operations in Greater China continued to weigh on results, shaving 80 basis points off overall organic growth. The company said a new management team has been installed in the region to execute a turnaround strategy.

Analysts welcomed the renewed focus on operational discipline. “The company appears to have turned the corner operationally,” said Jon Cox, Head of European Consumer Equities at Kepler Cheuvreux. “The market is responding well to clear signals of stronger management and a sharper strategic focus.”

Nestle’s shares, which have fallen more than 40% since their 2021 peak and 9% over the past year, rallied after Thursday’s announcement as investors viewed the restructuring as a step toward restoring confidence in the brand.

Analysts say Navratil’s main challenge will be sustaining growth while addressing underperforming segments, including the company’s water and vitamins businesses, and determining the future of its 20% stake in L’Oréal.

Pablo Isla, former CEO of Inditex, is set to succeed Paul Bulcke as Chairman after Nestle’s 2026 annual meeting, with expectations that the new leadership duo will deliver on their promise of renewed agility and efficiency.

“Now is the time for Nestle to show it can compete like a leaner, faster global brand,” said Cox. “This restructuring may be the reset investors have been waiting for.”