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Key takeaways
- Nestlé on Thursday offered the latest example of a large employer looking to save money by streamlining its white-collar workforce.
- The company did not specify how many cuts it planned over the next two years to take place in the United States, which recently acquired 15% of its total headcount.
White-collar workers are taking another hit.
Global food giant Nestle said on Thursday it would cut about 12,000 jobs as part of its cost-cutting efforts.The company said in a press release that the cuts will be “across functions and geographies.” It reported 277,000 employees worldwide in its latest annual report, about half of them outside factories, with about 15% in North America.
“The world is changing, and Nestlé must change faster,” Nestlé CEO Philippe Navratil said in a statement. “This will include making difficult but necessary decisions to reduce headcount over the next two years.”
Why is this news important?
Big tech companies aren’t the only ones cutting white-collar jobs, as today’s news from global food giant Nestlé shows. Economists have several ideas about the reason behind the cuts, including general economic concerns and artificial intelligence. Meanwhile, one economist believes that the labor market in the United States is moving at a slow pace.
“We are not in a position to give specific numbers or plans for the United States,” the company said in an email. Nestlé shares rose in European trading.
Large employers are increasingly downsizing their workforces, with some commentators discussing “white-collar stagnation”. Many of these cuts have come at large, high-profile technology companies, including some Magnificent 7 giants.
Economists have given several reasons, including the feeling that artificial intelligence will provide opportunities to reduce costs and streamline operations. Broader economic caution, including concerns about shifts in tariff policy that have complicated planning, are also seen as reasons.
Professional employment in the United States was little changed year over year in August, according to government data. It has declined over the past 12 months as total nonfarm employment has risen. (Due to the ongoing government shutdown, August is the last month for which numbers are available.)
The U.S. labor market is “running low-fire, low-employment, low-equipment this fall,” Bill Adams, chief economist at Comerica Bank, wrote earlier this month.
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