Beauty firm Estee Lauder has revealed it is more than doubling job cuts to as many as 7,000 worldwide as part of a cost-saving overhaul as it braces for tariff increases amid fears of a global trade war sparked by US President Donald Trump.
The group behind well-known beauty brands Estee Lauder, Clinique and Jo Malone said it plans to ramp up job losses from 3,000 to between 5,800 and 7,000 as it seeks to drive increased savings of up to 1 billion US dollars (£805 million).
It said the figure was on a net basis, after taking account of some staff it is looking to retrain and redeploy in other roles.
The jobs are set to go by the end of June next year.
Estee Lauder said the move to slash more jobs and costs is partly down to concerns over possible tariff increases, which follow plans by Mr Trump to slap penalties on goods from Mexico, Canada and China.
“The expanded plan is designed to further transform the company’s operating model to fund a return to sales growth and restore a solid double-digit adjusted operating margin over the next few years, and continue to manage external volatility, such as potential tariff increases globally,” a company spokesman said.
Estee Lauder – which employs around 62,000 people worldwide – did not say what the impact might be in the UK or how many jobs are going per country.
Estee Lauder Cosmetics employs around 4,400 staff in the UK and Ireland, according to the latest set of accounts for the UK division at Companies House.
Details of the group’s cost-cutting came as it revealed it slumped to a 590 million US dollar (£474 million) loss in its second quarter to the end of December, down from earnings of 324 million US dollars (£260 million) a year earlier.
It blamed weak demand at airports and subdued consumer spending in countries such as Korea and China.
Estee Lauder’s newly appointed president and chief executive, Stephane de La Faverie, said: “While we are not satisfied with our third-quarter outlook, it primarily reflects weak retail sales trends in our Asia travel retail business, which deteriorated in our second quarter, driven by Korea.”
He said the group, which also counts MAC make-up among its raft of brands, will boost “consumer-facing investments” around the world in its third quarter, partly funded by the cost-cutting plan.
“For the third quarter, we expect overall soft retail trends to persist in Asia travel retail, significantly pressuring our organic net sales,” he said.
