Sex Scandal and Slumping Performance: Nestl? to Cut 16,000 Jobs Over Two Years

Nestl?, the World's Largest Food Company, Announces Workforce Reduction
"Cost-Cutting Target Raised to 3 Billion Swiss Francs by 2027"
"5.8% of Global Employees to Be Laid Off... Automation to Be Introduced"

Nestl?, the world's largest food company, has announced plans to cut 16,000 employees over the next two years. According to Yonhap News, citing AFP and other sources on the 16th (local time), CEO Philippe Navratil has raised the company's cost-cutting target from 2.5 billion Swiss francs (approximately 4.4 trillion won) to 3 billion Swiss francs (approximately 5.3 trillion won) by 2027.

Nestl?, the world's largest food company, announced plans to cut 16,000 employees over the next two years. Reuters Yonhap News

This workforce reduction goal represents 5.8% of Nestl?'s approximately 277,000 employees worldwide. Nestl? stated that "the layoffs will include 12,000 office workers," and added that "shared services and work automation will be introduced."

Nestl?, known for its conservative corporate culture, dismissed CEO Laurent Frex last month after he was caught dating a direct subordinate. An industry veteran who joined Nestl? in 1986, Frex had been working to improve the company's structure, including considering the sale of underperforming divisions such as the supplements business after becoming CEO. However, Nestl? began an investigation after receiving a report through its internal grievance system regarding the CEO and his workplace relationship, and, following external legal consultation and a reinvestigation, concluded that there was an issue.

Nestl? dismissed CEO Laurent Frex last month after he was caught dating a direct subordinate. Reuters Yonhap News

The executive scandal also led to the early resignation of Chairman Paul Bulcke. Bulcke joined Nestl? in 1979, served as CEO from 2008, and became chairman of the board in 2017. He was originally scheduled to lead the board until the regular shareholders' meeting in April next year, but it appears he moved up his resignation due to the recent executive scandal.

Newly appointed CEO Navratil, who joined Nestl? in 2001 and mainly worked in the coffee division, including Nespresso, said during the earnings announcement, "We are creating a culture that values performance, does not tolerate a decline in market share, and rewards success."

Founded in Switzerland in 1866, Nestl? owns a portfolio of over 2,000 brands, including KitKat, Nescaf?, Purina, Nespresso, and San Pellegrino. However, the company has faced business challenges, with its stock price falling more than 40% from its 2022 peak. Nestl? reported that its sales for the first three quarters of this year decreased by 1.6% compared to the same period last year.

This content was produced with the assistance of AI translation services.