Food and beverage giant Nestlé has announced that it will cut 16,000 jobs worldwide over the next two years. These include 12,000 administrative and clerical positions, and an additional 4,000 roles in manufacturing, logistics and supply chains.

According to the company quoted by Euronews Portuguese, the layoffs are part of a broader effort to optimize Nestlé's workforce and focus investments on high-performance brands, and products with strong return potential: coffee, confectionery and premium products.

The next step is to complete the strategic reviews of the portfolio of premium water and beverage businesses and vitamin and supplement brands.

Nestlé's restructuring aims to improve profitability and efficiency at a time of growing pressures. The company's share price has fallen by around 35% since 2022. Sales growth increased by just 2.2% in 2024 - its weakest figure in years - although it rose to 3.3% in the first nine months of this year. Reported net sales, affected by exchange rates, reached 65.9 billion Swiss francs (70.96 billion euros) in the first nine months of 2025, a year-on-year decrease of 1.9%.

However, rising external costs and trade barriers continue to put pressure on margins, such as the recent 39% US import tariff on Swiss products.

Even so, the company expects the job cuts to generate annual savings of around CHF 1 billion and contribute to a total cost savings target of CHF 3 billion by the end of 2027.

"The management has great ambitions to bring Nestlé back to its track record, but for now the company is in the process of transformation. Nestlé's third quarter sales grew by 4.3% on an organic basis, beating market expectations by 0.6%. This is a short-term positive and investors will be optimistic about what this means for the company's medium-term prospects," explained Chris Beckett, consumer products analyst at Quilter Cheviot.

(Photo DR)