Nestlé’s New CEO Arrives With Fighting Talk and 16,000 Job Cuts
(Bloomberg) — Nestlé SA’s new chief executive officer, Philipp Navratil, may be following a strategy set in place by his ousted predecessor, but he’s quickly putting his own hard-driving spin on it.
Just weeks into the role, he announced plans to slash 16,000 jobs while reporting better-than-expected quarterly sales, sending the Swiss food group’s shares to their biggest gain in 17 years.
“We cannot accept losing market share ever,” the 49-year-old Nestlé veteran said in a video released after the results on Thursday. “We need to fight.”
For Navratil, fighting means driving up volumes and free cash flow, winning back market share, reducing debt and preserving the dividend.
The CEO, appointed after the sacking of Laurent Freixe for failing to disclose a romantic relationship with a subordinate, says Nestlé also needs to be more upfront about hard tasks ahead. Those include relieving 12,000 white-collar workers and 4,000 manufacturing and supply chain staff of their jobs to help generate 3 billion Swiss Francs ($3.7 billion) of savings by the end of 2027.
“We shied away from being transparent about this historically,” he said. “People can see the world is changing and we need to change with it.”
Navratil thinks he’s the right person to change Nestlé’s “mindset” and investors seemed to believe him on Thursday, with a stock rally that potentially buys the former Nespresso boss time to implement his plan and “get some competitiveness back.”
The foodmaker’s shares surged as much as 8.9% in Swiss trading, the biggest gain since 2008.
“We welcome Navratil’s ambition to foster a culture that does not accept losing market share and where winning is rewarded, which sounds more assertive than before,” said James Edwardes Jones, an analyst at RBC Capital Markets.
The staffing cuts, amounting to about 6% of the workforce, will occur over the next two years. The jobs announcement came alongside a 4.3% rise in third-quarter organic sales, driven by higher prices and improved real internal growth — a key measure of volumes closely watched by analysts and investors.
RBC’s Jones said the improvement in that metric was important as it’s been the biggest area of concern for investors.
Navratil joined Nestlé in 2001 and spent much of his career in central America, including Mexico. He later ran the global coffee unit, overseeing the Nescafé brand and the license agreement with Starbucks Corp., which analysts see as one of Nestlé’s most promising businesses. He became CEO of Nespresso in July 2024.
Nestlé is evaluating everything in its portfolio and he “won’t be constrained by preconceived ideas,” the CEO said. He also wants to get more Americans drinking Nespresso.
‘Ruthless’
When he was named CEO last month, Navratil said he would maintain Freixe’s strategy of boosting spending on advertising, betting on fewer but bigger product initiatives and getting rid of underperforming units.
His predecessor had begun a restructuring that included the potential sale of struggling vitamin brands and finding a potential partner for Nestlé’s bottled water business, which Freixe separated into a standalone unit. Navratil said these strategic reviews will continue and likely conclude during 2026.
Beyond that, Navratil spoke Thursday of building a “performance culture” at the group, whose product portfolio ranges from Nespresso capsules to KitKat candy bars and Purina cat chow.
“We are all measured at the same key performance indicators,” he told analysts on a call. “It will be easy to see who is performing and who is not. We will not keep the ones in the company who are not. We will be ruthless in assessing our people.”
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