MW Estee Lauder to lay off up to 7,000 - more than it initially planned

By Steve Gelsi

Beauty-products maker said in February it was expanding its earlier program to reduce workforce by up to 3,000

Estee Launder Cos. said Thursday it plans to cut up to 7,000 jobs as it deepens its head-count reduction efforts, as its third-quarter sales dropped 9%.

Estee Launder said its profit recovery and growth plan will cost up to $1.6 billion in one-time charges and save up to $1 billion a year "to help restore operating margin and also fuel reinvestment in consumer-facing areas to drive sustainable sales growth."

The New York-based beauty products company said it would eliminate between 5,800 and 7,000 positions. As of April 24, it had already approved $623 million to cut more than 2,600 positions.

The company said its gross margins grew by 310 basis points in the third quarter due to cost-saving efforts thus far.

Estee Lauder's stock $(EL)$ rose 1% in premarket trading on Thursday.

Looking ahead, Estee Lauder said it expects to report a wider double-digit net sales decline in its global travel retail business in its fourth quarter due to retailer shifts "toward more profitable duty-free business models in both Korea and mainland China as well as weak consumer sentiment and conversion from Chinese consumers."

It expects full-year adjusted earnings per share to decline. Analysts expect Estee Lauder to earn $1.39 a share for full-year 2025, down from its result of $2.59 a share in 2024.

Estee Lauder said its third-quarter profit dropped 42% to $306 million, or 44 cents a share, from $531 million, or 91 cents a share, in the year-ago quarter. Adjusted third-quarter earnings of 65 cents a share beat the FactSet consensus estimate of 31 cents a share.

Third-quarter sales fell 10% to $3.55 billion from $3.94 billion, ahead of the analyst estimate of $3.52 billion.

Estee Lauder initially announced job cuts in late 2023 to boost its 2025 and 2026 profit margins. It announced a two-year restructuring program of up to 3,000 jobs in February 2024.

In February of this year, Estee Lauder said it would expand its restructuring program, but did not provide any specific figures until Thursday.

As part of the job cuts, Estee Lauder said it would adopt a "more competitive approach" to its procurement by consolidating its spending and re-evaluating its suppliers.

It's also focusing on efforts to minimize excess inventory and product destruction, as well as the outsourcing of services to "proven global partners."

Estee Lauder had reported a total of 62,000 employees on its payroll in its 2024 annual report, which was filed in February of 2024.

Ahead of Thursday's moves, Estee Lauder's stock has fallen 20% in 2025, while the S&P 500 SPX has dropped 5.3%.

-Steve Gelsi

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May 01, 2025 08:45 ET (12:45 GMT)

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