Estee Lauder layoffs: Luxury skincare and makeup brand Estee Lauder may cut nearly 7,000 jobs by the fiscal year 2026. The layoffs will constitute more than 11% of its workforce.
The company plans to cut jobs after reporting losses in the recent quarter in addition to a 6 per cent fall in sales, according to a report by AP.
New York-based Estee Lauder, the parent company of popular makeup and skincare brands such as MAC, La Mer, and Aveda, lowered its profit outlook due to a slowdown in the economies of China and Korea along with global geopolitical uncertainty concerns.
Recently, China announced import tariffs on American goods and imposed an antitrust investigation on Tuesday. The import tariffs by China come in response to charges levied by US President Donald Trump on goods from China, Mexico and Canada.
The cosmetic maker aims to book restructuring and other job cut-related charges in the range of $1.2 billion to $1.6 billion before taxes.
Estee Lauder nearly had 62,000 employees across the world as of June 30, 2024, according to the company’s latest annual filing.
“We are significantly transforming our operating model to be leaner, faster, and more agile,” CEO Stéphane de La Faverie, who took charge as the company’s top executive last month, told AP.
“For the third quarter, we expect overall soft retail trends to persist in Asia travel retail, significantly pressuring our organic net sales,” reported Reuters, quoting Faverie.
The cosmetic maker is facing challenges in increasing sales growth in China, which will constitute nearly a quarter of the company’s sales in 2024, due to high unemployment, aslowdown in the economy, and growing preference for local brands.
“Simply said, we lost our agility. We did not capitalize on the higher growth opportunities,” Faverie said.
The company reported sales of $4 billion in the recent quarter, a dip from $4.28 billion in the corresponding quarter of the previous year.
The company is now aiming for a profit between 24 cents and 34 cents in the current quarter, lower than the 61 cents that Wall Street had been expecting, the report said citing Factset.
Shares of The Estée Lauder Companies Inc. fell nearly 15%, or $12.14, Tuesday.