Nestlé, the world’s largest food company, cuts 16,000 jobs partly because of automation

London
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Nestlé will cut around 16,000 jobs worldwide over the next two years as part of its efforts to reduce costs, notably through automation, the world’s largest food group announced on Thursday.

Most of the layoffs – around 12,000 – will affect white-collar workers, as Nestlé aims for “operational efficiency”, including by automating processes and using shared services, the company behind brands such as KitKat and Nesquik said in a statement. statement.

An additional 4,000 positions will be created in the manufacturing sector and supply chain as part of measures to improve productivity. The overall job cuts will amount to almost 6% of Nestlé’s workforce.

“The world is changing and Nestlé needs to change faster,” new CEO Philipp Navratil said in the release. “This will involve making difficult but necessary decisions to reduce headcount.”

The announcement comes as the rise of artificial intelligence has fueled fears about potential job losses in various industries. The CEO of Anthropic, a leading AI lab, warned in May that AI could cause a dramatic increase in unemployment.

Nestlé says on its website that it uses AI in a number of functions, including research and development. In his last annual reportthe company also said it uses automation and advanced analytics in promotional activities, such as working on discounts and in-store displays.

The planned layoffs add to the turmoil within the Swiss company after the unexpected dismissal of its previous chief executive in early September. Laurent Freixe was rejected for failing to disclose a romantic relationship with a direct report, which constitutes a violation of Nestlé’s Code of Business Conduct.

The company’s organic sales, a measure of underlying growth, rose 4.3% in the third quarter, it also reported Thursday. Nestlé reiterated its commitment to investing in the medium term despite “ongoing risks linked to macroeconomic and consumer uncertainties”.

Nestle the largest market This is North America. Consumers in the United States became pessimistic in recent months, as they worry about inflation, which could worsen due to rising U.S. customs duties. However, consumer spending has held up so far.

Nestle shares jumped early Thursday. As of 7:30 a.m. ET, it was trading up 7.6%.