Russ Mould, investment director at AJ Bell, said: “Nestle’s new CEO Philipp Navratil might have made more enemies than friends since taking the top job in September.
“He’s announced that 16,000 jobs will be cut over the next two years, three quarters of which will be white-collar workers.
“Doing so will double previous annual savings targets, but it doesn’t bode well for staff morale.
“Financial markets typically applaud widespread job cuts as removing costs from a business implies bigger profits. That explains why Nestle’s shares bounced on the news, alongside better than expected third quarter sales growth.
“Navratil says Nestle needs to ‘change faster’, suggesting widespread job cuts won’t be the only difficult decision he has to make.
“It’s plausible that the new CEO could further slim down the company via asset sales and get more demanding with raw material suppliers to strike better deals.”
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