Why Nestlé Is Betting Big on AI and Why It Might Work Where Others Fail
I’ve been very vocal about AI in the past year from The AI That Didn’t Take Your Job to 95% of Generative AI Projects Are Failing, but here we have another side to that same story.
When you hear “world’s largest food company” you probably think ships of chocolate bars, warehouses filled with water and sodas, freezers stacked with ice cream, and trucks rolling juice across continents.
What you might not immediately think is anything about artificial intelligence, robotics, and a plan to cut 16,000 jobs.
But that’s exactly what Nestlé is doing.
This seems to be one of the largest restructuring of a company because of AI where actual people might lose their jobs.
The Bold Move and the Numbers
Nestlé has announced it will eliminate approximately 16,000 jobs worldwide over the next two years, which is about 12,000 white-collar professional roles and around 4,000 across manufacturing and supply-chain functions.
That figure equates to nearly 6% of its total global workforce, and it’s a sweeping restructure, not a minor tweak.
Nestlé says it needs to accelerate, automate, streamline. CEO Philipp Navratil said, “The world is changing, and Nestlé needs to change faster.”
Now, when I looked into it, it seems like there have been more than a few issues in the past year at this giant company. In the full-year 2024 results, Nestlé reported organic growth of just +2.2%. Reported sales for 2024 fell by about -1.8% to CHF 91.35 billion. Net profit also declined for them, the company noted net profit of CHF 10.88 billion in 2024, down from the previous year.
A longer-term view is that some analysts data suggest earnings for Nestlé have been declining at an average annual rate of roughly -6.5%, while revenue growth is only about +1.7% per year.
So, the math is mathing, right? No CEO decides to lay off 16,000 people unless they think their headed for a cliff and need to start swimming against the current.
Why They Think AI Works for Them
All these issues are understandable why they think cutting out 16,000 jobs might help move the dial in their favor, but don’t forget, a lot of companies have failed to use AI in their day to day operations for a lot of reasons I’ve gone into in other posts. So, what makes Nestlé so sure it’ll work for them?
Well, Nestlé isn’t a little startup out of someones’ garage. It runs thousands of products, dozens of brands (KitKat, Nescafé, Perrier, etc.), and is a powerhouse in literally dozens of markets. That means many repetitive, codified processes like order management, forecasting, promotions, which are realistically ripe for automation.
With global supply-chains, retail networks, SCM logistics and enormous volumes of transaction data, Nestlé has the raw material that makes AI meaningful. Machine learning thrives on this volume and variety, all of which Nestlé has.
Also, their fixed costs are probably killing them right about now. In FMCG (fast-moving consumer goods), cost control is literal king and can be the difference between failure and success. Shrinking any internal redundancies by automating services, analytics, and supply functions can have big upside to it.
The 4,000 cuts in manufacturing/supply reflect a push to robotics and predictive maintenance, replacing human labor in areas where precision and scale serve well.
Where Others Have Stumbled And Why Nestlé Might Not
Many companies jump into AI without clear focus, fail to integrate with operations, or lack data governance in general. Nestlé’s global footprint and decades of operations mean they already have many systems in place, adding one or two more shouldn’t be as hard as it sounds.
Also, some AI projects are sold as “digital revolution” but wind up producing little value to the company in reality. Nestlé’s approach seems to be incremental with a front-end finance & admin, supply chain next stages instead of pie-in-the-sky, let’s change everything tomorrow.
Large scale firms that succeed show steps towards trimming waste at every opportunity they can to protect their bottom line. The job-cut announcement itself shows a clear effort to reduce their costs.
The Risks Lurking in the Shadows
It’s easy to see how Nestlé can think their strategy to move to automation will help their numbers in the end, but in the process of shifting over a lot of jobs to automation you’re removing human judgment, creativity, and context in the long haul. Let’s be honest, there’s a reason all interns haven’t been replaced with ChatGPT yet. It’s just not good enough.
Massive restructuring can stress HR, corporate culture, as well as supplier relationships. Systems may break down rather than flex in the short term and might need more eyes on it in the process.
Also, with AI, issues of bias, transparency, and job displacement become issues with their reputation. For a consumer-facing brand like Nestlé, this matters more than it might sound. Why would new people apply for jobs at a brand where in a few months they might lose their job when they have a new system come in?
Nestlé is showing that automation isn’t just for factory lines or warehouses anymore though, it’s creeping into boardrooms, marketing teams, and even some finance departments. White-collar labor is no longer untouchable, and this is a big moment in AI history.
Nestlé’s move acts as both blueprint and warning to the future of jobs. The labor market might be entering a white-collar restructuring era, where tasks rooted in routine, analytics, and process may be machine-augmented or replaced entirely.
For workers, the message is clear though, skills that stay safe are those rooted in real human judgment, strategy, creativity, and ambiguity, which machines can’t do yet. For companies though, automation winners will be those who integrate human + machine, not human vs machine.
Nestlé is betting that the future of food is not just what you eat, but how fast, how smart, how seamlessly it gets to you. Another movement to faster faster faster instead of changing anything like quality or the other issues going on under the hood.
I believe that speed isn’t enough and staying human in the machine’s era is the real long-term bet.
When the machines do their thing and the labor line is lean, the humans left standing will be those who think, feel, and imagine in ways the mechanics can’t.
Other Reads You Might Enjoy:
When Robots Run with Humans: Inside the Beijing Half-Marathon for Androids
The Algorithm That Tastes: How AI Is Learning to Make Fine Wine
When Flesh Meets Code: Human Neurons Integrated with Silicon Chips
The AI That Writes Its Own Rules: Inside DeepMind’s New Era of Algorithmic Creation
Elon Musk’s Grok 3.5: The AI That “Makes Up” Answers, and Why That’s Actually a Big Deal
