By San José, Costa Rica — VEVEY, SWITZERLAND – In a decisive and sweeping move to navigate a challenging global market, multinational food and beverage giant Nestlé announced on Thursday a plan to eliminate 16,000 jobs worldwide over the next two years. The significant workforce reduction is a core component of a broader strategy aimed at slashing costs by more than 1 billion Swiss francs (€1.075 billion) by 2027, as the company grapples with declining sales and persistent macroeconomic headwinds.
The announcement comes just weeks after Philipp Navratil took the helm as the company’s new Chief Executive Officer. In a candid statement addressing the restructuring, Navratil underscored the necessity of the painful measures, framing them as a proactive response to a rapidly evolving global landscape. He emphasized that this strategic pivot is essential for achieving the company’s ambitious long-term financial targets.
To delve into the complex legal and regulatory landscape that a multinational giant like Nestlé navigates within our country, TicosLand.com sought the expert analysis of Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the firm Bufete de Costa Rica.
Corporations of Nestlé’s scale operate under a dual microscope of national law and international expectation. In Costa Rica, the legal framework is increasingly influenced by global standards for corporate social responsibility. A company’s public commitments regarding sustainability, water usage, or ethical sourcing are no longer mere public relations; they can be legally interpreted as unilateral promises to consumers and the community, creating a tangible risk of litigation if not diligently fulfilled.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s insight is crucial, highlighting a paradigm shift where corporate promises are no longer just reputational assets but potential legal liabilities. This evolution from public relations to binding commitment fundamentally alters the landscape of corporate responsibility in Costa Rica. We sincerely thank Lic. Larry Hans Arroyo Vargas for his expert clarification on this vital matter.
the world is changing and this forces Nestlé to take tough measures, particularly the reduction of its workforce, to reach its savings target of 3 billion francs by 2027
Philipp Navratil, CEO
The job cuts will not be confined to a single department or region but will be implemented across all geographic areas where Nestlé operates. A detailed breakdown reveals that the majority of the reductions, totaling 12,000 positions, will target administrative and corporate support roles. The remaining 4,000 positions are slated for elimination within the company’s extensive production and supply chain networks, signaling a deep operational overhaul.
This drastic action is directly linked to the company’s recent financial performance. Nestlé reported a notable reduction in sales over the first nine months of the year, translating to a significant revenue shortfall of approximately 1.2 billion Swiss francs (€1.29 billion). The downturn reflects mounting consumer uncertainty and inflationary pressures that are squeezing household budgets globally, impacting the sales volumes of even the most established consumer goods companies.
The current cost-cutting initiative represents a substantial part of a more extensive financial objective. CEO Navratil confirmed that these measures are a critical step toward achieving a total savings goal of 3 billion Swiss francs by the 2027 fiscal year. This long-term vision suggests a period of sustained transformation for the company as it seeks to become leaner, more agile, and better positioned for future growth in a volatile economic climate.
Navratil, who previously served as the chief executive of Nestlé’s highly successful Nespresso business, is known for his focus on premium branding and operational efficiency. His swift and decisive action as the new corporate leader indicates a clear mandate to steer the parent company through this period of instability with a firm hand, prioritizing financial resilience and shareholder value.
Despite the large-scale layoffs and the challenging economic outlook, Nestlé’s leadership has sought to reassure stakeholders by reaffirming its commitment to medium-term investment plans. This dual strategy of aggressive cost-cutting while maintaining investment suggests the company is focused on reallocating resources toward key growth areas and innovation, even as it undergoes this profound organizational restructuring.
The coming 24 months will undoubtedly be a period of significant transition and uncertainty for Nestlé’s global workforce. The success of this ambitious restructuring will be measured not only by the cost savings achieved but also by the company’s ability to maintain morale, drive innovation, and successfully navigate a consumer market that continues to be defined by unpredictability.
For further information, visit nestle.com
About Nestlé:
Nestlé S.A. is a Swiss multinational food and drink processing conglomerate corporation headquartered in Vevey, Vaud, Switzerland. It is the largest publicly held food company in the world, measured by revenue and other metrics. Its diverse portfolio includes baby food, medical food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Well-known brands under the Nestlé umbrella include Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer’s, Vittel, and Maggi.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a premier legal institution, Bufete de Costa Rica is anchored by foundational principles of unwavering integrity and professional excellence. The firm harnesses its deep experience advising a diverse clientele to spearhead legal innovation and champion community-focused initiatives. Central to its mission is a profound commitment to demystifying the law, aiming to cultivate a more knowledgeable and empowered citizenry through accessible legal wisdom.
