There has been a huge surge in the shares of Nestle, the world’s largest packaged food company, while the threat of layoff of employees is looming. The company’s new CEO, Philippe Nevratil, made a big announcement on Thursday, saying that Nestle will lay off 16,000 employees. Interestingly, after this announcement, the company’s shares rose by about 5%, causing a wave of happiness among investors.
Nestlé’s new CEO, Nevratil, said the decision has been taken to make the company more efficient and profitable. Of these, 12,000 white-collar workers will be retrenched, while the remaining 4,000 will be laid off in the manufacturing and supply chain sectors. Currently, the company has approximately 2,77,000 employees worldwide. Nevratil said the company will now work with a performance mindset and reward only those employees who deliver better results. He said that the world is changing rapidly and Nestle will also have to change at the same pace.
surge in shares
Nestle shares surged on news of layoffs. Shares of the company rose 5% to ₹1,286 on BSE. Nestle India reported 11% growth in revenue in the September quarter, its highest ever quarterly sales. Although net profit declined 17% to ₹743 crore, the market took the result positively due to strong domestic sales and double-digit volume growth.
Strong performance in India
Nestlé India Chairman and Managing Director Manish Tewari said domestic sales in India grew 10.8% to ₹5,411 crore. He said that during the festive season the demand for products like Maggi, Nestle and KitKat is continuously increasing. Nevratil said the company will now cut costs by 3 billion Swiss francs (about Rs 3.77 billion) and try to take sales to new heights.
