In a bold move to reverse declining sales and restore investor confidence, Nestlé SA announced plans to eliminate 16,000 jobs worldwide, representing about 5.8% of its global workforce. The layoffs, unveiled by new Chief Executive Philipp Navratil, are part of a sweeping restructuring aimed at accelerating growth through increased marketing investments and operational efficiencies. This comes as the Swiss food giant grapples with weakening consumer demand and underperforming product lines.

Navratil, who took the helm just weeks ago, outlined the strategy during the company’s third-quarter earnings call on October 16, 2025. He emphasized a shift toward ‘RIG-led growth’—real internal growth—by ramping up spending on advertising, innovation, and premium product formats. According to Nestlé’s official press release, the company is targeting 2% RIG growth, supported by investments in 18 underperforming business units, particularly in coffee and premium segments, as reported by Dairy Reporter.

The job cuts, which include 12,000 white-collar roles and 4,000 in manufacturing and supply chain, are expected to unfold over the next two years. Nestlé aims to achieve cost savings of 3 billion Swiss francs by 2027, up from a previous target of 2.5 billion, through automation and streamlined operations. ‘Driving RIG-led growth is our number one priority. We have been stepping up investment to achieve this, and the results are starting to come through,’ Navratil stated in the company’s nine-month sales report, as cited by Nestlé Global.

Automation Drives Workforce Overhaul

This restructuring is not isolated; it’s part of a broader trend in corporate America where companies like Target, Starbucks, and Amazon are also announcing significant layoffs amid economic pressures. Nestlé’s move follows a year of over 946,000 job cuts across industries, the highest since 2020, fueled by slowing consumer demand and rising costs, according to eMarketer. For Nestlé, the focus on automation is key, with executives highlighting a transition to more efficient production methods to counter inflationary pressures.

Critics, including labor unions, have decried the layoffs. The International Union of Food Workers (IUF) demanded ‘people before profit,’ arguing that the cuts prioritize shareholder returns over employee welfare, as detailed in their statement on IUF’s website. Meanwhile, posts on X (formerly Twitter) reflect public sentiment, with users noting the irony of mass layoffs amid high inflation and economic uncertainty, such as one post highlighting that 2025 layoffs are at a 22-year high.

Navratil’s plan, dubbed ‘Fuel for Growth’ internally, seeks to balance cost-cutting with aggressive marketing. The company plans to boost advertising budgets to revive brands facing sales declines, particularly in North America and Europe. This strategy draws parallels to past turnarounds, but analysts question its timing amid broader retail challenges.

Marketing Push Targets Underperforming Brands

Nestlé’s sales have been under pressure, with nine-month figures showing positive trends but still lagging in key categories. The company reported stepping up investments in marketing and innovation, focusing on high-margin areas like coffee, where performance remains strong, per FoodNavigator. ‘Just weeks into his role, Nestlé CEO Philipp Navratil has announced a major cost-cutting plan, slashing 16,000 jobs to revive growth and restore investor confidence,’ the publication noted.

To combat declining sales, Nestlé is overhauling its portfolio, targeting 18 underperforming units for revitalization or potential divestment. This includes a sharper focus on premium formats and digital marketing to appeal to younger consumers. Expert insights from IndexBox suggest balancing immediate results with long-term brand health is crucial for successful turnarounds.

The strategy also involves enhancing retail partnerships, particularly with giants like Walmart and Target, where Nestlé products hold significant shelf space. As these retailers prepare for their Q3 earnings—Walmart reported a 5% revenue increase to $169.6 billion and 27% e-commerce growth in its FY25 Q3, per posts on X—Nestlé aims to leverage joint promotions and data-driven marketing to boost visibility.

Retail Partnerships Under Scrutiny

Declining sales at Nestlé have ripple effects on retail partners. Walmart and Target, both facing their own economic headwinds, have seen shifts in consumer behavior toward value-driven purchases. A post on X from App Economy Insights highlighted Walmart’s strong Q3 performance, with advertising up 28% year-over-year, presenting opportunities for Nestlé to deepen collaborations through targeted campaigns.

However, broader economic factors, including tariffs and inflation, are complicating these partnerships. Food prices remain elevated, with consumers cooking more at home, reminiscent of COVID-era trends, as reported by Powder & Bulk Solids in discussions of industry layoffs at companies like Hormel Foods and Frito-Lay. Nestlé’s increased marketing spend is designed to counteract this by emphasizing convenience and premium value.

Analysts from FoodManufacture opine that Navratil’s approach could yield CHF 3 billion in savings by 2027, but success hinges on execution. ‘Earlier this month, new Nestlé CEO Philipp Navratil revealed plans to cut around 16,000 jobs worldwide with an aim to increase its savings target to CHF 3 billion by the end of 2027,’ the article stated.

Investor Reactions and Future Outlook

Investor response has been mixed, with Nestlé’s shares fluctuating post-announcement. CNBC reported on the Q3 earnings, noting the job cuts as a signal of aggressive turnaround efforts under Navratil, per CNBC. The company’s focus on innovation, such as in sustainable packaging and health-oriented products, is seen as a long-term bet.

Amid global economic uncertainty, including potential tariffs and a consumer sentiment at a five-month low, Nestlé’s strategy must navigate headwinds. Posts on X discuss how tariffs could push shoppers toward discounters, impacting premium brands like Nestlé’s. Yet, partnerships with Walmart and Target could provide a buffer through co-branded marketing initiatives.

As Q3 earnings for retailers loom, Nestlé’s revamped approach will be tested. The company’s emphasis on digital transformation and automation positions it for efficiency gains, but the human cost of 16,000 layoffs raises ethical questions in an era of economic volatility.

Broader Industry Implications

The layoffs at Nestlé mirror a wave hitting the food and beverage sector. Yahoo Finance detailed the automation-driven cuts, stating ‘Nestlé announced 16,000 layoffs under new CEO Philipp Navratil as automation drives global restructuring and cost-cutting efforts,’ via Yahoo Finance.

Retail Brew, in its coverage of turnaround efforts, noted Nestlé’s job axes as part of hires, layoffs, and launches key to retail recovery, per Retail Brew. This includes synergies with Walmart and Target, where declining sales prompt stronger marketing ties.

Looking ahead, Navratil’s vision for Nestlé involves not just cost reductions but a cultural shift toward agility. As the company invests in marketing to counter sales slumps, industry insiders will watch closely for signs of sustainable growth in a challenging market.