Over 400 Nestlé employees in South Africa face layoffs

Nestlé S.A. has begun issuing retrenchment notices to more than 400 employees in South Africa, marking a new phase in a broader global restructuring aimed at simplifying operations and improving performance as the adoption of artificial intelligence accelerates worldwide.

People familiar with the matter said at least 100 employees have already entered severance discussions, an early sign of the scale of the changes under way. The process is expected to extend beyond South Africa, with additional job cuts likely in other African markets, including East Africa, as the company reshapes its regional footprint.

Pay-linked ratings reshape bonuses, layoffs

The layoffs come as the company rolls out a revised performance system designed to sharpen accountability and better link pay to results. Under the new structure, employees rated at the top “exemplary” level can earn up to 150 percent of their bonus targets, while those assessed as “unsatisfactory” may receive between 0 percent and 50 percent.

The company said the updated framework reduces complexity in performance reviews and makes it easier for managers to give clear feedback. Bonus targets will continue to vary across roles and teams, depending on business priorities.

Nestlé to cut 16,000 jobs globally

The overhaul follows leadership changes at the top of the Swiss group. Chief Executive Officer Philipp Navratil, who took over in September 2025 after the departure of Laurent Freixe, has set out plans to cut about 16,000 jobs over two years.

That figure represents roughly 6 percent of Nestlé’s global workforce. The company employs about 276,000 people worldwide, meaning the reduction could affect thousands of roles across offices, factories and supply chains.

Nestlé said the cuts will include about 12,000 positions from its 118,000 white-collar roles, as well as 4,000 jobs from its roughly 158,000 employees in manufacturing and supply operations. The changes are part of a broader effort to focus resources on its strongest-performing divisions while reducing costs in slower-growing areas.

Nestlé links bonuses to growth targets

Known for products such as Kit Kat and Nescafé, Nestlé is also working to lift sales volumes after reporting real internal growth of 0.8 percent in 2025. Navratil said a new “RIG gatekeeper” has been added to the bonus structure, setting a minimum threshold for volume growth before payouts are made. He added that bonuses for senior managers are now tied more closely to overall group performance, a move aimed at aligning teams behind common targets.

While Nestlé has not disclosed the financial impact of the layoffs, the planned reduction of 16,000 roles points to significant cost savings over time, potentially running into hundreds of millions of dollars annually depending on execution. For employees in South Africa and across the continent, the changes mark a period of uncertainty, even as the company says it is positioning itself for steadier growth.