Luxury beauty and skincare giant Estée Lauder has laid off 2,600 employees as part of a sweeping restructuring initiative aimed at reducing costs and stabilizing the business amid a significant drop in global sales. The layoffs represent the first major phase of the company’s broader plan to eliminate 7,000 jobs by 2026.
The move comes in response to a challenging retail environment and declining consumer demand, especially in key markets such as China, South Korea, and the United States. Estée Lauder reported a 10% decline in third-quarter sales and a more than 40% drop in profits, prompting urgent action to address operational inefficiencies.
The restructuring is expected to cost the company between $1.2 billion and $1.6 billion over the next two years. These costs are largely tied to severance packages, asset write-offs, and efforts to consolidate business functions. In turn, Estée Lauder aims to generate annual savings of up to $1 billion through streamlined operations, reduced overhead, and tighter inventory management.
The company’s CEO said the restructuring is designed to make Estée Lauder “leaner, faster, and more agile” in response to evolving consumer preferences and heightened global competition. In addition to job cuts, the plan includes simplifying supply chains, accelerating product innovation, and investing in marketing to attract younger and more digitally engaged customers.
The layoffs impact a wide range of roles across corporate offices, manufacturing, and regional markets. Estée Lauder, known for its premium brands such as La Mer, Clinique, and MAC, is also adjusting pricing strategies and expanding its presence in emerging markets to offset declines in traditional retail channels.
Despite these bold measures, investor confidence has wavered. The company’s stock dipped following the announcement, reflecting continued skepticism about the pace of recovery in the luxury beauty sector.
Estée Lauder’s transformation underscores the broader headwinds facing the industry, as inflation, changing shopping behaviors, and geopolitical tensions reshape the global beauty landscape.
