Estée Lauder to cut up to 10,000 jobs, targets $1.2bn in savings

Estée Lauder plans to eliminate up to 10,000 roles globally as part of an expanded restructuring programme aimed at delivering as much as $1.2bn in annual cost savings, even as it upgrades its profit outlook.

The latest cuts, which add up to 3,000 more roles to earlier plans, mark a significant escalation in the company’s transformation strategy. The announcement pushed shares up about 7% in early trading, according to Reuters.

Scale of cuts signals deeper reset

The revised plan lifts total expected job reductions from as many as 7,000 to between 9,000 and 10,000 roles.

At the upper end, this equates to around 17.5% of the company’s global workforce of 57,000, based on its latest annual filing.

The restructuring reflects a broader effort to reshape operations, reduce costs, and align the business with shifting consumer behaviour.

Key figures from the announcement include:

• Up to 10,000 total job cuts globally
• Additional 3,000 roles added to earlier plans
• Target of up to $1.2bn in annual cost savings
• Workforce base of approximately 57,000 employees
• Share price increase of about 7% following the update

The company did not provide a detailed timeline for the reductions but indicated that workforce changes remain central to its cost strategy.

Retail footprint under pressure

A significant portion of the additional cuts will fall on traditional retail channels.

According to Reuters, more than 70% of the incremental job reductions will come from department store roles, underscoring a structural shift away from legacy distribution formats.

The company is redirecting focus towards faster-growing channels, including specialty retail and e-commerce platforms such as Ulta Beauty, Sephora, Amazon and TikTok Shop.

This pivot reflects changing consumer purchasing patterns, with digital and specialty outlets gaining share at the expense of department stores.

Strategy tied to potential deal activity

The expanded restructuring comes as Estée Lauder explores a potential merger with Puig, owner of the Jean Paul Gaultier brand.

Analysts suggest the increased scale of layoffs may also relate to integration planning.

Sky Canaves, an analyst at eMarketer, told Reuters that the higher job cut target could indicate that Estée Lauder is positioning to eliminate overlapping roles on its side while preserving positions within Puig.

The company has not confirmed any timeline or outcome for the discussions.

Turnaround gains support outlook

The restructuring coincides with improving financial performance.

Under chief executive Stéphane de La Faverie’s “Beauty Reimagined” strategy, the company has pushed premium product launches and streamlined its supply chain.

Reuters reported that these efforts have helped lift quarterly sales in key luxury markets, including China and Europe, prompting the company to raise its annual profit forecast.

The combination of cost reduction and selective growth investment appears to be driving a dual-track strategy of efficiency and expansion.

External pressures weigh on demand

The company’s outlook is also shaped by geopolitical and macroeconomic factors.

Luxury demand has been affected in Middle Eastern markets such as Dubai and Abu Dhabi due to the impact of the ongoing Iran conflict, according to Reuters.

Estée Lauder said the disruption reduced quarterly sales by 1 percentage point and expects a 2 percentage point impact in the fourth quarter.

Other industry players have reported similar pressures. LVMH said in April that the conflict reduced its quarterly sales by at least 1%.

Puig has also indicated that demand has been affected, though it has maintained its full-year outlook.

Restructuring defines next phase

The scale of the planned layoffs signals a decisive shift in how Estée Lauder is positioning itself for the next phase of growth.

Cost discipline, channel realignment, and potential consolidation are now central to its strategy.

The company is betting that a leaner structure, combined with stronger exposure to digital and premium segments, will offset pressures from slowing consumer demand in key markets.

As the restructuring unfolds, attention will focus on execution. The ability to deliver savings without undermining brand equity or growth momentum will be critical.

For now, the direction is clear. Estée Lauder is moving aggressively to reshape its cost base and distribution model, even as it navigates an uncertain global demand environment.