Nestlé, a major FMCG company, plans to lay off 16,000 people. This decision was taken a few weeks ago by new CEO Philippe Navratil, who has just taken charge of the company. He has promised to rapidly transform and revive the company.
These job cuts will represent approximately 6 percent of Nestlé’s total workforce. CEO Navratil stated on Thursday that the world is changing, and Nestlé will have to change even faster. To achieve this, tough but necessary decisions will be taken, such as reducing the number of employees.
Nestle layoff details
Nestlé is a major FMCG company in the country, making Nespresso coffee capsules and KitKat candy bars. Nestlé stated that these cuts will occur over a two-year period. This will be global, meaning job losses will occur in every country where the company operates. This will include 12,000 white-collar jobs, in addition to the 4,000 job cuts already underway in production and supply chain. In total, the company will lay off 16,000 people in the coming period.
The CEO’s Ambitious Targets
The company says these cuts will result in savings of 1 billion Swiss francs, double the previously planned amount. Navratil was shocked when the company released nine-month figures. Sales fell 1.9 percent to 65.9 billion Swiss francs, but sales growth was not as high as expected.
Nestlé shares rose 3.4% in pre-market trading on Julius Baer. The company’s price has risen 1.7% this year, lagging behind the Swiss market index’s 8% growth. Philippe Navratil joined Nestlé in 2001 and has decades of experience. After taking charge, he hinted that he would continue his previous strategy. Increasing advertising spend, betting on fewer but larger product initiatives, and selling underperforming units are among his priorities.
Company results
The company’s profit declined to Rs 753 crore from Rs 986 crore in the second quarter of last year. Revenue increased to Rs 5,644 crore from Rs 5,104 crore in the previous year. EBITDA also increased to Rs 1,237 crore from Rs 1,168 crore, although margins declined to 21.9% from 22.9%.
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