US beauty and fragrance powerhouse Estee Lauder is set to potentially reduce its workforce by up to 7,000 employees—over 11% of its staff—by the end of next year following a recent financial downturn. The New York-based company, known for brands like MAC, La Mer, and Aveda, reported a 6% decline in sales, attributed to slowing economies in China and Korea, coupled with global geopolitical uncertainties.
In light of these challenges, Estee Lauder anticipates incurring restructuring charges between $1.2 billion and $1.6 billion before tax. The firm’s workforce stood at approximately 62,000 employees as of June 30, 2024. New CEO Stephane de La Faverie announced plans to overhaul the company’s operating model to enhance efficiency and agility.
The latest quarterly sales reached $4 billion, a decrease from $4.28 billion the previous year. Consequently, Estee Lauder has revised its profit expectations for the current quarter, projecting earnings per share between 24 and 34 cents—significantly lower than analysts’ expectations of 61 cents. Following this news, Estee Lauder’s shares plummeted nearly 15% on Wall Street, dropping by $12.14.