The Estee Lauder Cos. Inc. will lay off 3% to 5% of its global workforce this year, it said in a Feb. 5 second-quarter earnings call. Those job cuts will impact up to 3,100 of the beauty retailer’s 62,000 employees, The Wall Street Journal reported.

Layoffs are part of a multi-year plan to rebuild profit margins in 2025 and 2026, Estee Lauder said. 

“We are focused on strategically leveraging our strengths to accelerate our return to more sustainable profitable growth while elevating our consumer activations and increasing our operating agility,” chief financial officer Tracey Travis said. “The restructuring program is designed to right-size and streamline select areas within our organization, which unfortunately necessitates us making the difficult decision of an expected net reduction in positions globally of 3% to 5%.”

Estee Lauder ranks No. 43 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by online sales. 

Wayfair (No. 10 in the Top 1000), Amazon (No.1), Macy’s (No. 17) and Levi Strauss (No. 191) all also announced recent layoffs.

What were Estee Lauder’s financial results?

Estee Lauder reported net sales declined 7% to $4.28 billion in its second fiscal quarter ended Dec. 31.

Skin care made up the largest portion of sales, accounting for $2.17 billion in the quarter. That was a decline of 10% from $2.43 billion in the year-ago period. Makeup sales also declined, down 8% year over year to $1.17 billion. Fragrance sales grew slightly to $737 million from $734 million. Meanwhile, hair care sales declined 5% to $173 million.

The retailer attributed much of the sales decline to waning demand in China.

“This decline was primarily driven by the slowdown of overall prestige beauty in mainland China,” CEO Fabrizio Freda said in a statement. Online sales in China also declined, with worse than expected performance on Double 11 Day, also known as Singles Day, on Tmall. Tmall is an Alibaba-owned marketplace. Tmall is No. 2 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by gross merchandise value. Brick-and-mortar sales increased in China, but they were more than offset by the online decline.

Net sales in the Asia Pacific region fell 7% year over year, and the retailer lost some market share there, Freda said. Net sales in the Americas declined 1%. That was driven by decreasing demand in North America, partially offset by growth in South America. In Europe, the Middle East, and Africa, net sales declined 14% in the period. Part of the decline is due to rightsizing inventory levels, Estee Lauder chief financial officer Tracey Travis said, with 2% attributable to “business disruptions in Israel and other parts of the Middle East.”

Estee Lauder earnings

For the fiscal second quarter ended Dec. 31, 2023, Estee Lauder reported:

• Net sales declined 7% to $4.28 billion.
• Gross profit declined 8% to $3.13 billion.

For the six months ended Dec. 31, 2023, Estee Lauder reported:

• Net sales declined 9% to $7.80 billion.
• Gross profit declined 12% to $5.57 billion.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. 

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