Estée Lauder plans to cut up to 2,000 jobs globally after profits dive

Estée Lauder is planning to cut up to 2,000 jobs worldwide as it shuts stores and department store beauty counters after a slump in sales and profits during the coronavirus pandemic.

The makeup, skincare and perfume company, which also owns brands such as Joe Malone, Clinique, La Mer and MAC, said it intended to shut between 10% and 15% of its freestanding stores, with job cuts amounting to about 3% of its global workforce – mostly in stores as well as related support roles.

The cuts are expected to save the company up to $400m (£300m) a year. Estée Lauder revealed net profits more than halved to $680m in the year to June. The fall came despite the group making $800m worth of savings including cuts to advertising, travel and a recruitment freeze. A quarterly dividend due in June was also ditched.

UK retail and hospitality job cuts on back of Covid-19 crisis

Marks & Spencer – 7,000 jobs
18 August: Food, clothing and homewares retailer cuts jobs in central support centre, regional management and stores.

M&Co – 400 jobs
5 August: M&Co, the Renfrewshire-based clothing retailer, formerly known as Mackays, will close 47 of 215 stores.

WH Smith – 1,500 jobs
5 August: The chain, which sells products ranging from sandwiches to stationery, will cut jobs mainly in UK railway stations and airports. 

Pizza Express – 1,100 jobs
4 August: The restaurant chain plans the closure of 70 restaurants as part of a rescue restructure deal.

Dixons Carphone – 800 jobs
4 August: Electronics retailer Dixons Carphone is cutting 800 managers in its stores as it continues to reduce costs.

DW Sports – 1,700 jobs at risk
3 August: DW Sports fell into administration, closing its retail website immediately and risking the closure of its 150 gyms and shops.

Marks & Spencer – 950 jobs
20 July: The high street stalwart cuts management jobs in stores as well as head office roles related to property and store operations.

Ted Baker – 500 jobs
19 July: About 200 roles to go at the fashion retailer’s London headquarters, the Ugly Brown Building, and the remainder at stores.

Azzurri – 1,200 jobs
17 July: The owner of the Ask Italian and Zizzi pizza chains closes 75 restaurants and makes its Pod lunch business delivery only

Burberry – 500 jobs worldwide
15 July: Total includes 150 posts in UK head offices as luxury brand tries to slash costs by £55m after a slump in sales during the pandemic.

Boots – 4,000 jobs
9 July: Boots is cutting 4,000 jobs – or 7% of its workforce – by closing 48 opticians outlets and reducing staff at its head office in Nottingham as well as some management and customer service roles in stores.

John Lewis – 1,300 jobs
9 July: John Lewis announced that it is planning to permanently close eight of its 50 stores, including full department stores in Birmingham and Watford, with the likely loss of 1,300 jobs.

Celtic Manor – 450 jobs
9 July: Bosses at the Celtic Collection in Newport, which staged golf’s Ryder Cup in 2010 and the 2014 Nato Conference, said 450 of its 995 workers will lose their jobs.

Pret a Manger – 1,000 jobs
6 July: Pret a Manger is to permanently close 30 branches and could cut at least 1,000 jobs after suffering “significant operating losses” as a result of the Covid-19 lockdown

Casual Dining Group – 1,900 jobs
2 July: The owner of the Bella Italia, Café Rouge and Las Iguanas restaurant chains collapsed into administration, with the immediate loss of 1,900 jobs. The company said multiple offers were on the table for parts of the business but buyers did not want to acquire all the existing sites and 91 of its 250 outlets would remain permanently closed.

Arcadia – 500 jobs
1 July: Arcadia, Sir Philip Green’s troubled fashion group – which owns Topshop, Miss Selfridge, Dorothy Perkins, Burton, Evans and Wallis – said in July 500 head office jobs out of 2,500 would go in the coming weeks.

SSP Group – 5,000 jobs
1 July: The owner of Upper Crust and Caffè Ritazza is to axe 5,000 jobs, about half of its workforce, with cuts at its head office and across its UK operations after the pandemic stalled domestic and international travel.

Harrods – 700 jobs
1 July: The department store group is cutting one in seven of its 4,800 employees because of the “ongoing impacts” of the pandemic.

Harveys – 240 jobs
30 June: Administrators made 240 redundancies at the furniture chain Harveys, with more than 1,300 jobs at risk if a buyer cannot be found.

TM Lewin – 600 jobs
30 June: Shirtmaker TM Lewin closed all 66 of its outlets permanently, with the loss of about 600 jobs.

Monsoon Accessorize – 545 jobs
11 June: The fashion brands were bought out of administration by their founder, Peter Simon, in June, in a deal in which 35 stores closed permanently and 545 jobs were lost.

Mulberry – 470 jobs
8 June: The luxury fashion and accessories brand is to cut 25% of its global workforce and has started a consultation with the 470 staff at risk.

The Restaurant Group – 3,000 jobs
3 June: The owner of dining chains such as Wagamama and Frankie & Benny’s has closed most branches of Chiquito and all 11 of its Food & Fuel pubs, with another 120 restaurants to close permanently. Total job losses could reach 3,000.

Clarks – 900 jobs
21 May: Clarks plans to cut 900 office jobs worldwide as it grapples with the growth of online shoe shopping as well as the pandemic.

Oasis and Warehouse – 1,800 jobs
30 April: The fashion brands were bought out of administration by the restructuring firm Hilco in April, with all of their stores permanently closed and 1,800 jobs lost.

Cath Kidston – 900 jobs
21 April: More than 900 jobs were cut immediately at the retro retail label Cath Kidston after the company said it was permanently closing all 60 of its UK stores.

Debenhams – 4,000 jobs
9 April: At least 4,000 jobs will be lost at Debenhams in its head office and closed stores after its collapse into administration in April, for the second time in a year.

Laura Ashley – 2,700 jobs
17 March: Laura Ashley collapsed into administration, with 2,700 job losses, and said rescue talks had been thwarted by the pandemic.

While online sales surged during the pandemic, this did not fully offset the temporary closure of retail outlets around the world, Estée Lauder said. Sales were also hit by the reduction in air travel, which affected trade at airports.

Fabrizio Freda, its chief executive, said the group had delivered record sales and earnings growth in the first half of the financial year . But then the coronavirus crisis hit its business, owing to the closure of offices and retailers as well as significant decline in social gatherings, the company added. Demand for skin care was resilient, with sales up by a quarter for core products from Estée Lauder and La Mer. However, sales of makeup, haircare and fragrance all fell while beauty counters and salons were closed for weeks.

Physical distancing rules meant that close contact beauty treatments, such as facials, makeovers and eyebrow grooming, which are key parts of the sales pitch in department store beauty halls’, only resumed on 15 August in England. Many beauty halls remain closed.

Sales of lipstick, which is traditionally counted as a comforting purchase in hard times, have fallen during the crisis partly as a result of the need to wear masks in many public places.

The Estée Lauder figures reflect changes across the industry.The UK health & beauty chain Boots plans to shed 4,000 jobs – the equivalent of 7% of its workforce – despite strong online growth. The beauty group L’Oreal, said its sales decreased by more than 11% in the first half of this year.

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.

These latest job cuts came as the US reported a 135,000 increase in the number of people seeking unemployment benefits. Claims rose to 1.1m last week, compared with an expected fall to 925,000, evidence that many employers continued to slash jobs as coronavirus affects the economy. A rising number of people who have lost jobs said they consider their loss to be permanent.

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