Beauty behemoth Estée Lauder sent shockwaves through the industry on Tuesday, unveiling a sweeping restructuring plan that will see up to 7,000 jobs slashed in a desperate bid to combat dwindling demand. The devastating cuts—amounting to nearly 10% of the company’s global workforce—triggered a market bloodbath, with shares plummeting nearly 20%.
The Manhattan-based cosmetics empire, long helmed by New York’s influential Lauder family, is now in the hands of newly appointed CEO Stéphane de La Faverie, who took the reins on Jan. 1. Tasked with steering the company through turbulent waters, de La Faverie is spearheading an aggressive turnaround strategy as Estée Lauder fights to reclaim its former glory.
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La Faverie explained the company’s problems to investors in an earnings call saying, “Simply said, we lost our agility. We did not capitalize on the higher growth opportunities.”
“For the third quarter, we expect overall soft retail trends to persist in Asia travel retail, significantly pressuring our organic net sales,” he added.
Meanwhile, Estée Lauder launched Beauty Reimagined, which the company calls its new strategic vision.
The company said this will put the consumer at the “heart of our business and rapidly expand our portfolio presence in consumer-preferred, high-growth channels, markets, media and price tiers to participate in key growth opportunities in prestige beauty.”
It will also create “transformative innovation” across prestige price tiers, to deliver fast-to-market, on-trend innovation focused on in-demand subcategories, benefits, and occasions. And boost consumer-facing investments: Increase visible advertising spending, optimize marketing programs and eliminate low-return activities to accelerate new consumer acquisition.
“Today, we are excited to launch Beauty Reimagined, a bold strategic vision to restore sustainable sales growth and achieve a solid double-digit adjusted operating margin over the next few years as we aim to become the best consumer-centric prestige beauty company,” said Stéphane de La Faverie, President and Chief Executive Officer. “While we recognize there is much work to do, we are confident that Beauty Reimagined is the way to realize our ambition. We are significantly transforming our operating model to be leaner, faster, and more agile, while taking decisive actions to expand consumer coverage, step-change innovation, and increase consumer-facing investments to better capture growth and drive profitability. Together with our talented employees, fundamental values, and incredible brands, Beauty Reimagined positions us to lead the prestige beauty industry once again.”
Estée Lauder is a globally recognized brand synonymous with luxury skincare, makeup, fragrance, and hair care products. Founded in 1946 in New York, the brand’s success is attributed to its commitment to quality, innovation, and understanding the evolving needs of its consumers.
Estée Lauder is a subsidiary of The Estée Lauder Companies Inc., one of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance, and hair products. The company owns a diverse portfolio of brands, including Clinique, MAC Cosmetics, La Mer, and many others.
The brand has a strong online presence and is available for purchase at major department stores and specialty beauty retailers worldwide. Estée Lauder also has a dedicated website and social media channels where customers can learn more about the brand and its products.
Estée Lauder is a brand that has consistently delivered high-quality products and experiences to its customers for over 75 years. With its commitment to innovation and understanding the needs of its consumers, the brand is poised to continue its success for many years to come.
