NEW YORK — Estee Lauder has announced plans to eliminate up to 7,000 positions by fiscal 2026, accounting for over 11% of its workforce, following a challenging financial quarter where the global beauty brand experienced a 6% decline in sales.
The New York-based company, which owns well-known brands including MAC, La Mer, and Aveda, has adjusted its profit forecasts due to the deceleration of economies in China and Korea, compounded by ongoing global geopolitical tensions.
On a related note, China recently imposed retaliatory tariffs on various American goods and launched an antitrust investigation into Google. This development came shortly after the implementation of new tariffs on Chinese imports initiated by former President Donald Trump.
In light of these changes and the workforce reductions, Estee Lauder anticipates incurring restructuring and other related expenses, estimated to be between $1.2 billion and $1.6 billion, before tax implications.
According to the company’s latest annual report, Estee Lauder employed approximately 62,000 individuals worldwide as of June 30, 2024.
Stéphane de La Faverie, who recently took on the role of CEO, emphasized the need for the company to evolve its operational framework to become “leaner, faster, and more agile.”
During the latest quarter, the company reported sales totaling $4 billion, a decrease from $4.28 billion in the same quarter the previous year.
For the ongoing quarter, Estee Lauder has revised its earnings per share projection to fall between 24 cents and 34 cents, significantly lower than the anticipated 61 cents per share predicted by analysts from FactSet.
As a result of these developments, shares of The Estée Lauder Companies Inc. plummeted 16% to $69.47 on Tuesday, marking the steepest decline the stock has seen in nearly two years.
