The biggest food company in the world is cutting a lot of jobs. On Thursday, Nestlé announced plans to cut about 16,000 jobs around the world over the next two years. Automation and artificial intelligence will be key to the restructuring.
White-Collar Jobs Hit Hardest
The Swiss food company that makes famous brands like KitKat, Nesquik, and many others will lay off about 12,000 white-collar workers. It uses automation and shared services to make its operations more efficient. To boost productivity, 4,000 more jobs in manufacturing and supply chain operations will be cut. The cuts affect almost 6% of all of Nestlé’s workers.
CEO Announces Workforce Reduction Strategy
“The world is changing, and Nestlé needs to change faster,” Philipp Navratil, the company’s new CEO, said in a statement on Thursday. “This will require making tough but necessary choices about the size of the workforce.”
AI Integration Across Operations
Nestlé has been using AI technology in many parts of its business, such as research and development. The company’s most recent annual report talks about how it uses automation and advanced analytics for marketing. It also includes managing discounts and making the most of in-store displays.
Growing Concerns Over AI Job Displacement
The announcement adds to worries about job losses in many fields caused by AI. In May, the head of Anthropic, a major AI research group, said that progress in AI could lead to huge rises in unemployment rates around the world.
Leadership Turmoil Continues
The job cuts come on top of the recent instability at Nestlé, which started when its former CEO unexpectedly left in early September. Laurent Freixe was fired for not telling the company about a romantic relationship with a subordinate. This went against the company’s rules for how to do business.
Strong Sales Despite Challenges
Nestlé said that organic sales rose by 4.3% in the third quarter, which is an important measure of fundamental growth, despite the turmoil. The company said it would keep investing in the medium term. This comes even though there are still problems with the economy and consumers.
North America Market Remains Key
North America is still Nestlé’s biggest market, but consumers in the U.S. are becoming more pessimistic because of rising prices and the possibility of higher tariffs. But so far, consumer spending has shown that it can bounce back.
Stock Price Surges on Announcement
The news was good for investors, and by 7:30 a.m. ET on Thursday, Nestlé’s stock was up 7.6%.
