Estée Lauder Plans Major Layoffs in Corporate Restructuring

Estée Lauder Companies (EL) is eliminating up to 7,000 positions in a corporate restructuring aimed at revitalizing the struggling beauty conglomerate.

Revenue Decline and Challenges

The company projects a revenue decline of 10-12% in Q1 2023, exceeding analysts' expectations. This shortfall is attributed to ongoing challenges in the duty-free business in Asia, particularly in China and Korea, and subdued consumer sentiment.

CEO's Turnaround Plan

Stéphane de La Faverie, appointed CEO in January, is spearheading a turnaround plan to reverse the sales slump. He aims to:

* Gain market share in high-end cosmetics through product innovation and marketing.
* Expand the existing turnaround plan to address declining sales volume.
* Cut costs by streamlining supplier relationships and outsourcing services.

Portfolio Review

Estée Lauder is partnering with Evercore Inc. (EVR) to review its portfolio of brands, which includes Clinique, MAC, Smashbox, Tom Ford, and Aveda.

Share Performance

EL shares have declined by 45% in the past year. Market analysts will closely scrutinize De La Faverie's "Beauty Reimagined" plan and its potential impact on the company's financial performance.