Burberry announced it would cut around 1,700 jobs worldwide by 2027 to reduce costs amid tumbling profits.
This comes as the clothing brand reported a 17% fall in revenue and recorded a £66 million (A$136 million) loss.
“After a challenging first half, we have moved at pace to implement Burberry Forward, our strategic plan to reignite brand desire, improve our performance and drive long-term value creation,” Burberry CEO Joshua Schulman said in the company’s financial report.
“While we are operating against a difficult macroeconomic backdrop and are still in the early stages of our turnaround, I am more optimistic than ever that Burberry’s best days are ahead and that we will deliver sustainable, profitable growth over time.”
In order to recuperate costs, the company plans to find £60 million in savings through axing 1,700 jobs, including removing the entire night shift at its Yorkshire raincoat factory which makes coats priced between £1,000 and £10,000 each.
"For a long time we have had overcapacity at that facility, and that is simply not sustainable," Schulman said.
"But I want to be very clear that we are making this change to safeguard our U.K. manufacturing, and in fact we will be making a significant investment to renovate this factory in the second half."
The move would affect almost a fifth of its staff after Burberry employed around 9,300 people around the world last year.
However, the move has experienced some pushback, with an organiser from the GMB union, which represents workers at the factory, Darren Travis, saying it was a “sad blow” for the workers and Castelford.
“Burberry is the town’s biggest employer and more than a quarter of the workforce are going,” Travis said.
The clothing brand has been struggling in recent years due to a weak luxury market and a series of short-lived attempts to revive the brand with new designers.
Despite this, our chief creative officer, Daniel Lee, seems to be safe from the cuts despite being seen to be at risk under the new regime.
After the strategy was implemented, shares rose about 8%.
