Nestlé, the world’s largest food and beverage company, announced on Thursday that it will cut about 16,000 jobs globally over the next two years as part of a sweeping cost-reduction programme aimed at saving 3 billion Swiss francs ($3.7 billion) by 2027.

The job cuts, which will affect employees worldwide, including 12,000 white-collar positions, come amid what the company described as a “necessary restructuring” to adapt to changing global market conditions and improve efficiency through automation and shared services.

“The world is changing, and Nestlé needs to change faster,” said Philipp Navratil, who took over as chief executive officer last month following a leadership shakeup. “This will include making hard but necessary decisions.”

Nestlé, which owns over 2,000 brands including Nespresso, KitKat, Toll House, Perrier, and Purina, employs approximately 277,000 people globally. The Switzerland-based conglomerate said its plan would not only reduce costs but also improve its long-term competitiveness by reallocating resources to more profitable business units.

The announcement marks an escalation of an earlier plan to cut 2.5 billion francs in spending over the same period. The company’s latest move follows months of internal turmoil after the abrupt departure of its former CEO, Laurent Freixe, who was dismissed over an undisclosed relationship with a subordinate — a violation of Nestlé’s code of conduct. Shortly after, chairman Paul Bulcke resigned and was replaced by Pablo Isla, the former chairman of Spanish fashion giant Inditex.

Investors responded positively to the announcement, with Nestlé’s shares rising more than 8 per cent in Thursday’s trading on the Zurich stock exchange. Analysts at Vontobel, a Zurich-based investment management firm, said the new management was “going in the right direction” and praised Mr Navratil’s “strong focus on resource allocation, innovation, and a performance mind-set.”

Nestlé has faced mounting pressure from shareholders in recent months due to sluggish growth, falling demand in China, and rising input costs for commodities such as coffee and cocoa beans. These challenges have been compounded by U.S. tariffs, including a 39 per cent levy on Swiss imports introduced under the Trump administration, which further strained operations in the company’s largest market.

In a statement, Mr Navratil said Nestlé would now be “rigorous in its approach to resource allocation, prioritising the opportunities and businesses with the highest potential returns.” He added that automation and the consolidation of internal services would help absorb much of the impact from the workforce reduction.

The restructuring announcement came alongside Nestlé’s third-quarter financial results, which showed a 4.3 per cent increase in sales, driven largely by price adjustments and steady product demand. Despite global trade headwinds and currency fluctuations, the company maintained its 2025 growth outlook, projecting moderate sales recovery and improved margins.

The job cuts mark one of Nestlé’s largest global workforce reductions in recent history.