Nestlé slashes 16,000 jobs while overhauling bonuses and core business focus
Nestlé has announced significant changes to its business strategy and employee compensation structure. The company is eliminating around 16,000 jobs while refocusing on four key segments: coffee, pet care, nutrition, and food & snacks. At the same time, a new bonus system will tie executive pay more closely to group performance.
The company's latest financial results show 3.5% organic growth for 2025, with an underlying trading profit margin of 16.1%. Free cash flow reached CHF 9.2 billion, and shareholders will receive a proposed dividend of CHF 3.10 per share. However, a costly recall of infant formula—linked to cereulide contamination—has impacted profits, costing an estimated CHF 185 million.
For 2026, Nestlé aims for 3% to 4% organic growth, a higher profit margin, and free cash flow above CHF 9 billion. The company is also restructuring its operations, selling its remaining ice cream division to Froneri and preparing to spin off its water brands by 2027.
Employee bonuses will now depend on stricter performance criteria. A new six-tier evaluation system replaces the old three-tier model. Under the updated rules, top-rated staff could earn up to 150% of their target bonus, while those rated 'unsatisfactory' may receive between 0% and 50%. Additionally, variable pay will only be awarded if the company meets a minimum growth threshold, known as Real Internal Growth (RIG).
Nestlé's stock has risen recently, trading at €90.57—a 14% increase over the past month. The company currently employs around 271,000 people worldwide, though no details have been released on how the 16,000 job cuts will be distributed.
The restructuring aims to streamline Nestlé's operations while linking bonuses more directly to company-wide results. With a sharper focus on core business areas, the firm expects improved financial performance in the coming years. Shareholders will watch closely as the changes take effect.
