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Tuesday, March 5, 2024

Estee Lauder cuts 3% to 5% of global workforce as sales and profits slide

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Estee Lauder is cutting 3% to 5% of its global workforce, as the cosmetics giant aims to increase profits and become more nimble in a challenging international environment.

The layoffs were announced on Monday as the New York company reported falling profits and revenue in the second quarter, dragged down by sluggish sales in China.

The downsizing, which will affect as many as 3,100 workers, will be made by July, Estee Lauder said.

The company employed 62,000 workers worldwide, according to its latest regulatory filing.

The company, whose brands include Clinique and La Mer, said it expects to take restructuring and other charges of between 500 million dollars (£400 million) and 700 million dollars (£560 million), before taxes, consisting of employee-related costs, contract terminations, asset write-offs and other costs associated with implementing the initiative.

Estee Lauder expects the job cuts to deliver annual savings of between 350 million dollars (£280 million) and 500 million dollars, before taxes, Estee Lauder said.

Estee Lauder joins a growing list of companies that have announced layoffs in recent weeks, including some well-known household names like Amazon, Google and UPS.

Yet American businesses and other employers added a blistering 353,000 jobs in January, the largest surge in hiring in a year even as the US Federal Reserve raised interest rates repeatedly to cool the US economy and tame inflation.

Estee Lauder’s share rose more than 14%, or 19.36 dollars (£15.46) to 153.48 (£122.56) dollars in morning trading.

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