Fresh revelations have exposed the dramatic internal crisis that rocked the world's largest food company, Nestlé, leading to the sudden ousting of its chief executive and thousands of job losses.
The Rise and Spectacular Fall of a CEO
Laurent Freixe, 63, was removed from his position as Nestlé's CEO on September 1, after just twelve months at the helm. His dismissal followed a third-party investigation that found he breached the company's code of conduct by failing to disclose a relationship with a subordinate. The Paris-born executive, married to high-flying director Agata Balcerowska, was terminated without pay.
Freixe had built a 25-year career at the Swiss giant, notably helping to grow the Nescafé Dolce Gusto coffee division into a multi-billion pound revenue stream during his time as Head of Europe. However, his tenure as CEO unravelled over an undisclosed relationship with a female employee, which became an open secret within the company and caused widespread discontent.
A Web of Favouritism and Internal Power Struggles
Insiders report that the unnamed woman, who joined Nestlé as a management trainee two decades ago, was promoted to premier positions and received boosted pay under Freixe's leadership. She was allegedly placed in a prominent role on the Latin America team, which covered marketing for the US, Canada, and Latin America.
This move placed her directly in the realm of Steve Presley, the Nestlé veteran running the Latin America division. Presley reportedly grew suspicious that his new marketing executive was briefing CEO Freixe about their private meetings. The situation escalated into a major power struggle between the two top executives.
In April, Freixe and Presley met at Nestlé's headquarters in Vevey, Switzerland, to resolve the conflict. The outcome was that Presley, after nearly 30 years with the firm, agreed to resign. Freixe then assumed his responsibilities, making himself the direct boss of his mistress and intensifying allegations of improper favouritism.
Scandal Erodes Trust and Triggers Corporate Purge
The house of cards finally collapsed when the long-term mistress allegedly discovered Freixe with another employee in a Zurich hotel room. She filed a formal complaint, triggering a rapid internal probe. While an initial Nestlé investigation in late July found no wrongdoing, a subsequent law firm probe led to Freixe's firing.
The scandal sent shockwaves through the corporation, contributing to a tumble in share prices of more than 20 percent as debt levels ballooned and sales growth stalled. The new CEO, 49-year-old Philipp Navratil, has since taken drastic action to stabilise the company and restore confidence.
Navratil has cut 16,000 jobs and tied executive pay more closely to performance, moves analysts see as a direct attempt to dismantle the cozy practices that flourished under Freixe. In a recent podcast for staff, Navratil admitted, "Trust has been eroded with some of the events we have seen recently. Some of our making." He has promised to bring a new generation to the 159-year-old company that will "question everything."
