Estee Lauder may slash up to 7000 jobs to return to profitability

Estee Lauder lipsticks
Estee Lauder will undergo a restructuring program to restore profitability. (Source: Bigstock)

Estee Lauder warns of the possibility to eliminate 5800 to 7000 roles as part of a restructuring program to restore profitability.

The luxury beauty and fragrance brand expects the restructuring to yield annual gross benefits of between $800 million and $1 billion before taxes.

The company said that the restructuring aims to bring back a double-digit adjusted operating margin over the next few years while continuing to manage external volatility, such as potential tariff increases worldwide.

The announcement comes as Estee Lauder reports swinging to a net loss of $590 million, with net sales declining 6 per cent to $4 billion in the fiscal second quarter that ended December 31.

The Americas revenue fell 2 per cent to $1.22 billion, while Africa decreased 6 per cent to $1.49 billion, and Asia Pacific decreased 11 per cent to $1.29 billion.

“We are significantly transforming our operating model to be leaner, faster, and more agile, while taking decisive actions to expand consumer coverage, step-change innovation, and increase consumer-facing investments to better capture growth and drive profitability,” said Stephane de La Faverie, The Estee Lauder Companies president and CEO.

For the fiscal third quarter, the company forecasts continued volatility and low visibility amid challenges in its Asia travel retail business, soft consumer sentiment in China and Korea, and global geopolitical uncertainty.

Earlier, Estee Lauder promoted Michael Bowes to EVP and chief people officer, effective April 1.

You have 7 articles remaining. Unlock 15 free articles a month, it’s free.