Estee Lauder Plans to Cut 7K Jobs Amidst Sales Slump

Estee Lauder plans to reduce its workforce by up to 7,000 jobs, accounting for more than 11% of its employee base, by fiscal 2026. This decision follows a 6% downturn in sales and financial losses reported in its most recent quarter. The company cites economic slowdowns in China and Korea, coupled with global geopolitical challenges, as factors impacting its earnings projections.

The New York-based company, which owns brands like MAC, La Mer, and Aveda, anticipates incurring charges between $1.2 billion and $1.6 billion, before taxes, related to restructuring efforts. CEO Stéphane de La Faverie said: "We are significantly transforming our operating model to be leaner, faster, and more agile."

On June 30, 2024, Estee Lauder employed approximately 62,000 individuals worldwide. Sales dropped from $4.28 billion last year to $4 billion this quarter. The company now expects profits between 24 and 34 cents in the current quarter, which falls short of the 61 cents anticipated by Wall Street analysts according to FactSet. This news led to a 15% decrease in share value, translating to a $12.14 drop on Tuesday.

Compounding these issues, China has announced tariffs on American imports and initiated an antitrust investigation into Google. (This story was generated by Newser's AI chatbot. Source: the AP)