Nestlé says layoffs are part of building culture ‘where winning is rewarded’; the human cost of RTO

1. Nestlé announced this week that it would lay off 16,000 workers over the next two years, 12,000 of them white collar roles, according to the New York Times. The move comes at a difficult time for the company: their former CEO was fired six weeks ago for an inappropriate relationship with a subordinate, waning demand from China and the impact of American tariffs.

An investor statement attributed to new CEO Philipp Navratil addressed the layoffs:

As Nestlé moves forward, we will be rigorous in our approach to resource allocation, prioritizing the opportunities and businesses with the highest potential returns. We will be bolder in investing at scale and driving innovation to deliver accelerated growth and value creation. We are fostering a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded.

The world is changing, and Nestlé needs to change faster. This will include making hard but necessary decisions to reduce headcount over the next two years. We will do this with respect and transparency. Along with other measures, we are working to substantially reduce our costs, and today we are increasing our savings target to CHF 3.0 billion by the end of 2027.

The actions we are taking will secure Nestlé’s future as a leader in our industry. Collectively, they will enable us to improve our overall performance and deliver shareholder value.”

Shareholders indeed reacted positively to the news, with the stock increasing 8% in Swiss exchanges.

While this statement is not explicitly internal, we can safely assume most workers, particularly the white-collar workers impacted, would read it.

The message is clear, both for those who will leave the organization as well as those who will remain: the company is changing. Those who remain will be expected to turn in real results, work hard — but they’ll be “rewarded” for that work.

The sympathetic language to those impacted is glossed over quickly — “hard but necessary” — while most of the statement focuses on how the company will need to change to maintain and grow its industry position.

Because this is a more investor-focused statement, it’s a bit tougher and more bottom-line focused than many internal communications documents. However, it still functions to make sure workers understand what they’re in for: a few hard years of transformation, followed, hopefully, by plenty of rewards.

2. LendingTree CEO and founder dies in ATV accident; company mourns

Doug Lebda, CEO, chairman and founder of LendingTree, died over the weekend in an ATV accident, the company announced.

The statement reads, in part:

“Doug’s unwavering commitment to our team, customers and partners shaped LendingTree’s culture and values and permanently changed the way in which consumers access financial products. His passion will continue to inspire us as we move forward together. We extend our deepest sympathies to Doug’s family and loved ones during this difficult time.

The Board will work closely with Scott and the leadership team to honor Doug’s vision. We are committed to upholding his legacy and continuing the work he began with passion, integrity and dedication.”

The statement also announced that Scott Peyree, who had been serving as COO and president, would step into the CEO role, effective immediately.

It’s never easy to lose a leader, especially when they’re a founder. The fact that his death was so sudden, with no long illness and time to prepare, made this an especially difficult challenge, especially when team members who knew Lebda may be struggling with grief.

However, LendingTree’s statement threads the needle of sympathy for Lebda’s family, appreciation for his legacy, while also charting a clear path forward with a new yet familiar leader quickly installed.

It’s also notable how the statement emphasized Lebda’s contributions to culture, not just to the bottom line. Leaders help define a company, but Lending Tree is signaling that there will be no major cultural shift under a new leader, likely a reassurance to unsettled workers.

3. RTO mandates lead to higher turnover, difficulty hiring, study finds

It’s no secret that when workers are asked to return to the office, some will refuse. In fact, it’s often seen as a way to reduce headcount without requiring formal layoffs. But a new study from Baylor University puts explicit numbers around what happens to headcount and hiring when RTO mandates are put in place.

The study, which examined 54 large technology and financial firms, found that:

• RTO mandates lead to abnormal turnover rates of 13-14%.
• The employees most likely to leave are women, mid- and top-level managers, and highly skilled workers.
• Job vacancy durations increase by 21% and hiring rates decline by 17%.

Additionally, employees who do leave are more likely to take lateral positions or even take a demotion in return for the flexibility they’re looking for.

In comms, it isn’t your job to determine whether RTO is the right move or not. But it is up to you to communicate how the organization is supporting employees through this process. Emphasizing opportunities for flexibility, career support and patience as workers readjust to full-time work can go a long way.

Conversely, choosing to take a hard line and emphasize tough rules can help reduce headcount faster, if that’s the underlying goal. Make sure you ask questions about the true intent of these policies to craft communications that best meet those goals, whatever they may be.

4. How about some good news?

• A group of British archivists is rescuing data trapped on old floppy disks.
• The University of British Columbia is testing mushroom-powered outhouses.
• The nation of Suriname has pledged to protect 90% of its forests — forever.
• Ragan Training is great for communications pros to find inspiration and resources.
• You should be rewarded for your work. Find out how to earn an award here!
• Do you have an internal comms nightmare you want to tell us about for a Halloween-themed piece? Click here!

Allison Carter is editorial director of PR Daily and Ragan.com. Follow her on LinkedIn.