Estee Lauder to cut jobs in expanded restructuring plan
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Estee had outlined a plan for fiscal years 2025 and 2026 to lower its expenditure and rebuild margins.
PHOTO: REUTERS
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BENGALURU - Estee Lauder expanded its restructuring programme on Feb 5 to include cutting about 3 per cent to 5 per cent of its workforce, as the cosmetics conglomerate aims to rebuild its profit margins after a delayed rebound in its key China business.
Shares of the New York-based company were up 17 per cent in pre-market trading after Estee said it expects to drive incremental operating profit between US$1.1 billion (S$1.48 billion) and US$1.4 billion, compared with the US$800 million to US$1 billion it estimated earlier as part of its plan.
Estee had outlined a plan for fiscal years 2025 and 2026 to lower its expenditure and rebuild margins.
The firm said it would start the programme in the third quarter of fiscal 2024 and expects to take on restructuring and other charges of between US$500 million and US$700 million, before taxes.
As at June 2023, Estee had about 62,000 employees worldwide. Of these, 71 per cent were full-time, 16 per cent temporary and 13 per cent part-time employees.
The company also cut its annual profit forecast as recovery in its businesses has been much slower, as consumption took a beating in China, which is witnessing a higher youth unemployment rate and a property crisis.
Estee expects full-year 2024 adjusted profit per share of between US$2.08 and US$2.23, compared with the prior forecast of US$2.17 to US$2.42.
The company’s net sales fell 7 per cent to US$4.28 billion in the second quarter, compared with analysts’ estimate of US$4.19 billion, according to London Stock Exchange Group data. REUTERS
