Estee Lauder Announces Job Cuts Amidst Economic Uncertainty
New York, NY - Global beauty cosmetics company Estee Lauder plans to eliminate up to 7,000 jobs by fiscal 2026, representing over 11% of its workforce. This move follows a financial loss in the most recent quarter, as well as a 6% sales decline.
Despite strong brand recognition for MAC, La Mer, and Aveda, Estee Lauder has revised its profit outlook due to slowing economic growth in China and Korea, coupled with broader geopolitical uncertainties.
China recently imposed retaliatory tariffs on certain U.S. imports and initiated an antitrust investigation into Google. Estee Lauder anticipates restructuring and job cut-related expenses between $1.2 billion and $1.6 billion before taxes.
As of June 2024, Estee Lauder employed approximately 62,000 people globally. CEO Stéphane de La Faverie stated, "We are undergoing a comprehensive transformation to enhance operational efficiency and agility."
In the latest quarter, sales totaled $4 billion, a decrease from $4.28 billion in the previous year. Estee Lauder now projects earnings per share of 24-34 cents for the current quarter, significantly lower than Wall Street's estimate of 61 cents, according to FactSet.
Shares of The Estée Lauder Companies Inc. experienced a decline of nearly 15% on Tuesday, with a drop of $12.14 in value.