Estée Lauder Companies (ELC) has confirmed the elimination of around 3,200 jobs, with a further 3,800 positions under review. The announcement, made on 13 August, comes six months after the Clinique-owner warned that up to 7,000 roles could be affected by a sweeping corporate overhaul, reported Bloomberg.
The cuts are part of the company’s ‘Beauty Reimagined’ restructuring strategy, which aims to streamline operations and deliver up to US$1bn in annual savings, the Financial Times reported. But the cost of the transformation is steep: ELC has already booked $747m in charges, and expects total costs to range between $1.2bn and $1.6bn.
Despite the upheaval, Stéphane de La Faverie, President and Chief Executive Officer of ELC, maintained that the plan is on track. Speaking on the group’s full-year 2025 investor call, he said the transformation is fostering new momentum across the organisation.
“We are very pleased with the progress that we are making at this point, the team is really committed to the challenges that we are facing,” de La Faverie said. “The culture is evolving and it is changing, but we are really pushing on ambition and accountability throughout every pillar of brands, regions, and functions of the organisation.”
While his remarks projected confidence, the announcement has added uncertainty for thousands of employees across global markets, particularly in Asia where consumer demand has been subdued.
The job cuts were unveiled alongside full-year results showing an 8% drop in organic net sales to $14.3bn for the 12 months ended 30 June 2025, reported Reuters. Gross profit also declined 5% to $10.5bn, as weakness spread across most categories except fragrance.
The downturn was attributed to weaker demand in Asia, particularly in global travel retail, as well as broad-based declines across skin care, make-up, and hair care. Market share gains in mainland China and Japan provided some offset, led by luxury brands La Mer and Tom Ford Beauty.
Skin care sales fell 12%, dragged down by lower demand for Estée Lauder and La Mer. Ongoing weak consumer sentiment in China and reduced travel retail purchases contributed to the decline, the Financial Times reported. Retailers in Korea and China have also shifted strategies to more profitable duty-free models, reducing replenishment orders and exacerbating the slide.
Make-up posted a 5% decline, with MAC Cosmetics hit hardest in the face category and broader retail softness. New launches such as the M·A·C Nudes Collection and MACximal Sleek Satin Lipstick offered some support, but not enough to reverse the trend. Too Faced and Bobbi Brown also registered declines.
Fragrance sales were flat overall, supported by luxury houses Le Labo and Kilian Paris. Le Labo’s City Exclusives and Classic Collection underpinned performance, but Tom Ford Beauty weakened in North America as demand softened.
Hair care suffered the steepest decline, down 10%, following Aveda’s closure of freestanding stores and weaker bricks-and-mortar sales.
ELC is also grappling with external headwinds. The company acknowledged that new tariffs introduced under US President Donald Trump’s administration pose significant risks, reported Bloomberg. ELC is considering adjustments to its regional manufacturing footprint and is leveraging available trade programmes to mitigate the blow.
The company expects to offset more than half of the tariff impact, but still forecasts around $100m in additional costs to profitability in fiscal 2026.