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.
RELATED STORY | Chuck E. Cheese makes a comeback with new attractions, membership deals
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.
"We are significantly transforming our operating model to be leaner, faster, and more agile," said CEO Stéphane de La Faverie, who became the company's top executive last month.
The company posted sales of $4 billion in the latest quarter, down from $4.28 billion in the same period last year.
RELATED STORY | Starbucks plans to remove 30% of its menu items this year
Estee Lauder now expects profit per share between 24 cents and 34 cents in the current quarter, far below the 61 cents per share that Wall Street had been expecting, according to FactSet.
Shares of The Estée Lauder Companies Inc. fell 16% to $69.47 Tuesday, its biggest one-day drop in nearly two years.
