Nestle to Cut 500 Jobs in Biggest Swiss Restructuring Plan
(Bloomberg) -- Nestle SA plans to cut as many as 500 computer-service jobs in its home market of Switzerland as Chief Executive Officer Mark Schneider aims to boost profitability at the world’s largest food company.
Nestle is shifting information-technology jobs to locations including a tech hub in Spain, the company said Tuesday. Its Nespresso coffee unit is also moving jobs to Spain and Portugal and will offer positions to 80 employees affected by that reorganization. The unit will also open a site in Italy to develop Nespresso boutique stores.
Schneider is starting Nestle’s biggest restructuring program in Switzerland, reducing staff there by 5 percent after having faced pressure from investors such as Dan Loeb to cut costs. The strength of the Swiss franc in recent years has ramped up the company’s expenses. Chief Financial Officer Francois-Xavier Roger has accelerated Nestle’s five-year restructuring plan and predicted 700 million francs ($706 million) of reorganization costs this year.
“Nestle remains fully committed to its home base,” Peter Vogt, head of human resources, said in a statement. The company said it’s investing 300 million euros ($346 million) in the country this year. “The relationship between Nestle and Switzerland is mutually beneficial.”
The stock traded 0.4 percent lower at 2:37 p.m. in Zurich. It has dropped about 7 percent since last June, when Loeb’s Third Point LLC announced a stake of more than $3.5 billion.
The government of the Swiss canton of Vaud, where Nestle is based, said it has requested a meeting with Nestle management this week to discuss ways to reduce the impact of the restructuring. Nestle officials also assured the government that the company has no further plans to cut jobs in Switzerland, according to a statement.
Nestle said it plans to make the cuts in Switzerland over the coming 18 months. The company will offer employees training and help to switch to other positions and accept voluntary departures.
In recent weeks, Nespresso workers in Lausanne, Switzerland, have protested against a plan to add more weekend shifts and lengthen workweeks to 43 hours from 41 at its capsule factories.
Separately, Nestle also said Tuesday it plans to close the headquarters of its Equatorial Africa unit in Nairobi, Kenya, as costs to maintain it have been too high over the past decade given the size of the business.
The company had 323,000 employees worldwide in 2017, ranking sixth among European employers. Nestle’s Swiss staff has swelled to more than 10,000 last year from about 6,700 in 2003.
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