The beauty group Estée Lauder is planning to axe 1500 to 2000 jobs worldwide, representing about 3% of its total workforce. Most of the cuts will be store employees and support workers.
The makeup, skincare, and perfume company, which owns brands such as Bobbi Brown, Clinique, Dr. Jart+, Glam Glow, Jo Malone, La Mer, Mac, Michael Kors, Origins, Smashbox, Tom Ford Beauty, said on Thursday that it will close up to 15% of its freestanding stores and some department-store beauty counters, and will turn its attentions to online sales.
Estée Lauder said the pandemic had accelerated changes in where consumers shop, what they value, why they purchase products and how they engage with brands.
“We are better aligning our bricks-and-mortar footprint to improve productivity and invest for growth,” CEO Fabrizio Freda said in a statement. He added that the company is entering its new fiscal year with “cautious optimism".
The company expects this move can save it up to US$400m per year.
Amid COVID-19, due to temporary closure of offices and retailers, the reduction in air travel, a significant decline in social gatherings, the sales of makeup, haircare and fragrance has been heavily impacted.
In the fourth quarter, that ended on 30 June, net sales fell 32% to $2.43 billion, according to Bloomberg.
Meanwhile, the sales of skin care products such as eye creams and moisturisers remained resilient and increased by 25%. Online sales also surged during at this time.
The company previously announced cuts to advertising and travel, and a hiring freeze, which would have saved them an estimated $800m.
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