Estée Lauder Cos. to cut 3,200 jobs

Blaming weak sales in China and duty-free markets, The Estée Lauder Cos. approved 3,200 job cuts. The company signaled it could reduce headcount by another 3,800 with expected restructuring charges of up to $1.6 billion. The restructuring is expected to be completed by the end of 2026.

“The Company now estimates a net reduction in positions of 5,800 to 7,000, including approvals to date. This net reduction takes into account the elimination of positions after retraining and redeployment of certain employees in select areas,” ELC said in a statement. “Approvals for specific initiatives under this restructuring program, in total, are still expected to be completed by the end of fiscal 2026.” 

A Tough Fiscal 2025

The announcement came as part of the new leadership team’s strategic progress and outlook. In fiscal 2025, sales fell 8% to $14.3 billion. Operating margin fell from 6.2% to 5.5%.

“Having closed fiscal 2025 as expected, we remain wholly focused on continuing to execute our strategic vision of Beauty Reimagined with excellence,” said President and CEO Stéphane de La Faverie. “Despite continued volatility in the external environment, we embarked on fiscal 2026 with signs of momentum and confidence in our outlook to deliver organic sales growth this year after three years of declines and to begin rebuilding operating profitability in pursuit of a solid double-digit adjusted operating margin over the next few years.”

Declines in Most Categories

In fiscal 2025, sales fell in nearly all product categories. Specifically:

• Skincare -12%

• Makeup -6%

• Haircare -10%

• Other -13%

Fragrance sales were flat.

By region, sales fell 4% in the Americas, 12% in EMEA and 7% in Asia Pacific. As noted, ELC blamed the decline on double-digit net sales decline from the Company’s global travel retail business, which is included in EMEA, driven by lower net sales in Asia travel retail, due to ongoing subdued sentiment and lower conversion from Chinese consumers.

Estee Lauder to cut up to 7,000 jobs

NEW YORK (AP) — Estee Lauder may trim as many as 7,000 jobs by fiscal 2026, more than 11% of its workforce, after the global beauty cosmetics maker lost money in its most recent quarter as reported a 6% sales slump

The New York company behind such brands as MAC, La Mer and Aveda tempered its profit outlook as the economies of China and Korea slow, in addition to global geopolitical uncertainty.

China announced retaliatory tariffs on some American imports and an antitrust investigation into Google on Tuesday, just minutes after a sweeping levy on Chinese products imposed by U.S. President Donald Trump took effect.

Estee Lauder expects to book restructuring and other charges related to the job cuts of between $1.2 billion and $1.6 billion, before taxes.

As of June 30, 2024, Estee Lauder had roughly 62,000 employees worldwide, according to the company’s latest annual filing.

ELC has been under fire for months. In November, Jane Lauder stepped down as vice president of enterprise marketing and chief data officer. That move left the company Lauder-less when it comes to day-to-day operations. Some observers speculated she left after trying to oust her cousin William Lauder from the executive chairman’s seat. Last month, Ronald S. Lauder announced he would retire from the board of directors.

The C-suite shakeup began last year when long-time CEO Fabrizio Freda announced his retirement. Stéphane de La Faverie took over on Jan. 1, 2025.

Estée Lauder to eliminate up to 3,000 jobs

Two-year restructuring program to eliminate up to 3,000 positions. 

The Estée Lauder Companies will eliminate up to 3,000 jobs as part of a two-year restructuring program. The move includes the "reorganization and rightsizing of certain areas of the company as well as simplification and acceleration of processes."

More specifically, ELC will eliminate in the range of approximately 1,800 to 3,000 positions globally. That represents about 3-5% of its positions including temporary and part-time employees as of June 30, 2023. This reduction takes into account the elimination of some positions as well as retraining and redeployment of certain employees in select areas.

The restructuring is expected to be completed in fiscal 2026. ELC expects that the restructuring program will cost $500-$700 million, before taxes, consisting of employee-related costs, contract terminations, asset write-offs and other costs associated with implementing these initiatives.

Once fully implemented, the company expects the restructuring program to yield annual target gross benefits of between $350 million and $500 million, before taxes, a portion of which is expected to be reinvested in consumer-facing activities. The net benefits are in addition to the between $800 million and $1 billion previously communicated as part of the profit recovery plan.