A beauty retailer now announces unexpected job cuts as it seeks to refocus on driving sustainable profitability, sources report.
Estée Lauder will cut up to 5% of positions according to its latest restructuring plan.
The layoffs come as sales fell 7% in the second quarter, reports Retail Dive.
Estée Lauder Companies said Monday that it plans to cut between 3% and 5% of its positions as part of a restructuring program that will begin during the company’s 2024 fiscal third quarter.
This reduction includes the elimination of some positions as well as retraining and redeployment of certain employees.
The company said it employed about 62,000 people as of June 2023.
The restructuring program, including the layoffs, will cost between $500 million and $700 million from employee-related costs, asset write-offs and other charges.
However, the program is expected to produce gross profits of between $350 million and $500 million.
Added to Estée Lauder’s broader profit recovery plan, the business now expects to drive an incremental operating profit of $1.1 billion to $1.4 billion, up from $800 million to $1 billion.
News of the restructuring plan came as Estée Lauder reported earnings, with net sales during the three months ended Dec. 31 falling 7% to $4.28 billion, down from $4.62 billion a year earlier.
Net earnings for the quarter were $313 million, down 21% from $394 million a year ago.
Estée Lauder is building upon its profit recovery strategy with the rollout of a restructuring program, aimed at rightsizing its business and simplifying its processes.
The plan is expected to be “substantially completed” by the end of fiscal 2026.
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Also Read: Another Massive Bank is Now Laying Off 600 Employees
Other Economy News Today
A massive shoe retailer is now closing locations after store employees said the business was “priced out” after a rent increase.
The Journeys in the Arnot Mall will be closing on January 20 after the company announced plans to shutter 100 stores, reports The-Sun.
Select staff will be transferred to other Journeys locations.
The store is located in Horseheads, which is about two hours south of Syracuse.
The manager said the closure was disappointing and the employees are like family.
There is no closing sale because all the merchandise will be transferred to nearby locations.
This comes after Genesco, which owns the shoe store, announced it would close 100 stores and move away from malls.
In May, it was initially estimated that only 60 locations would close after net sales dipped 7% due largely to a 13% decrease at Journeys.
Genesco expects to save up to $40 million from the closures, reports Retail Dive.
Now the company plans to shift the store’s presence away from malls.
“We still have work to do, but we are so far encouraged by the early reads and believe this initiative will represent a key element in Journeys’ growth moving forward,” said Genesco CEO Mimi Vaughn during an earnings call.
The JCPenney in the Shenango Valley Mall also fought to stay open for years but is set to close in the next few months.
The two businesses had been in a legal dispute for years because the mall wanted to evict the retailer and renovate the property, which is located in Pennsylvania.
JCPenney sued the mall and the court eventually ruled in favor of Butterfli Holdings LLC, the owners of the mall.
It was the last anchor store in the mall after Macy’s and Sears closed in 2017.
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Also Read: A US Company Now Declares An Unexpected Bankruptcy
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