**Estee Lauder Layoffs: Global Beauty Brand to Cut Nearly 7,000 Jobs**
Estee Lauder, the luxury skincare and makeup brand, is planning to eliminate close to 7,000 positions by the fiscal year 2026, which represents over 11% of its workforce. This decision follows a recent quarter marked by financial losses and a 6% decline in sales, as reported by AP.
Based in New York, Estee Lauder is the parent company of well-known brands such as MAC, La Mer, and Aveda. The company has revised its profit outlook downward due to economic slowdowns in China and Korea, coupled with concerns over global geopolitical uncertainties.
In recent developments, China has imposed import tariffs on American goods and initiated an antitrust investigation, actions that are seen as retaliatory measures against tariffs imposed by the U.S. on products from China, Mexico, and Canada.
Estee Lauder anticipates restructuring and job cut-related expenses ranging from $1.2 billion to $1.6 billion before taxes. As of June 30, 2024, the company employed nearly 62,000 individuals worldwide.
CEO Stéphane de La Faverie, who recently took the helm, stated, “We are significantly transforming our operating model to be leaner, faster, and more agile.” He also noted that the company expects continued weak retail trends in Asia’s travel retail sector, which will heavily impact organic net sales.
The brand is grappling with challenges in boosting sales growth in China, which is projected to account for nearly 25% of its sales in 2024. Factors such as high unemployment, an economic slowdown, and a growing preference for local brands are contributing to these difficulties. “Simply put, we lost our agility. We did not capitalize on the higher growth opportunities,” Faverie remarked.
In the latest quarter, Estee Lauder reported sales of $4 billion, down from $4.28 billion in the same quarter the previous year. The company is now projecting profits between 24 cents and 34 cents for the current quarter, significantly lower than the 61 cents anticipated by Wall Street analysts.
Following this news, shares of The Estée Lauder Companies Inc. dropped nearly 15%, or $12.14.
