As part of the restructuring efforts at Estee Lauder, under its Beauty Reimagined turnaround strategy, 11 per cent of the global workforce may be let go. That means at least 5,800 people from the workforce will be eliminated. The number may even go up to 7,000 with the C-suite also likely to be impacted by the revamp.
Some employees may be retrained and reassigned to other roles. The downsizing will incur expenditure in the range of $1.2 billion to $1.6 billion, covering severance, assets and other charges pertaining to the restructuring exercise.
The New-York headquartered cosmetics company had announced workforce reductions in February of 2024. As part of the restructuring, the company had at the time anticipated a net reduction of about three to five per cent of its workforce by 30 June, 2024. It appears that this plan has now been extended with the trimming going up to 11 per cent of the workforce.
Interestingly, it has hardly been a month since Stephane de La Faverie took over as the CEO. The posts of chief digital marketing officer, data analytics officer and chief technology officer are waiting also to be filled, say media reports.
While the restructuring exercise will see some roles being consolidated, other new roles may be created. It is hoped that the company will be able to achieve pre-tax gross benefits in the range of $800 million and $1 billion. Part of these savings will be invested into enhancing consumer experience and advertising. Marketing-related innovations and outsourcing of services are also on the anvil. The company is keen to bring waste down to zero and eliminate excess inventory.
The objective of the restructuring plan is to achieve sustainability in terms of sales growth and adjusted operating margin in double digits in the near future.