Estée Lauder Job Cuts: China & Sales Weakness
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Estée Lauder Announces Restructuring,Layoffs Amidst Sales Decline
NEW YORK,August 20,2025 – Estée Lauder Companies is undergoing a significant transformation,announcing plans for up to 7,000 job cuts and restructuring charges perhaps reaching $1.6 billion. This news comes as the beauty giant reported a wider loss for its fourth quarter, partially attributed to severance costs, and a 3% decline in sales across the Asia-Pacific region.
The company initially disclosed a restructuring plan in February, and has now approved layoffs of 3,200 staff as of August 13th, with $747 million in associated severance and other charges. An additional 2,600 to 3,800 positions could be eliminated,potentially impacting up to 12% of the company’s global workforce.
“I’ve said it multiple times – this is the biggest organizational transformation that we have done in our history,” stated Chief Executive Stéphane de La Faverie during a recent investor call. “The culture is evolving and it’s changing, but we are realy pushing on ambition and accountability.”
The restructuring aims to generate $800 million to $1 billion in annual cost savings, allowing for reinvestment in key areas to drive future sales growth. Though, the company anticipates headwinds in fiscal year 2026 due to potential tariff increases.
Despite these efforts, Estée Lauder’s stock dropped approximately 5% on Wednesday following the announcement of a full-year profit miss. the company is facing challenges including a slowdown in travel retail, particularly in duty-free shops, and subdued consumer sentiment in mainland China.
Fourth-quarter sales figures reflected this pressure, with skincare products declining 16% and makeup sales falling 11%. The company is focused on adapting to these market conditions and streamlining operations to ensure long-term success.