Luxury beauty giant Estee Lauder is set to cut 7000 jobs - the equivalent of 11% of its workforce - by fiscal 2026.
As of the previous financial year, Estee Lauder employed roughly 62,000 people.
This comes as the international cosmetic brand reported a 6% drop in net sales in the previous quarter.
“We are significantly transforming our operating model to be leaner, faster, and more agile, while taking decisive actions to expand consumer coverage, step-change innovation, and increase consumer-facing investments to better capture growth and drive profitability,” said CEO Stéphane de La Faverie.
Sales on all products except for fragrances have experienced a decline.
Net sales for the company that is parent to brands including MAC, La Mer and Aveda, is reflective of an overall challenging retail environment, including subdued consumer sentiment in the key markets of mainland China, Korea and Hong Kong.
The company posted sales of US$4 billion in the latest quarter, down from $4.28 billion in the same period last year.
However revenue was still slightly above the anticipated $3.977 billion.
The company exceeded analysts' predictions, achieving an adjusted earnings per share (EPS) of $0.62 versus the expected $0.32.
Given challenges in the Company’s Asia travel retail business and evolving global geopolitical uncertainty as a result of US tariffs, Estee Lauder anticipates continued volatility and low visibility in the near term.
At the time of writing this Estee Lauder Companies Inc (NYSE: EL) stock was trading at US$69.47 diving 16.07% from Monday’s close at $82.77. The stock reached a day low of $66.59 and a day high of $83.06. Estee Lauder Companies Inc’s market cap stands at $25.21 billion.