Cosmetics giant Estee Lauder feels impact of Trump tariffs, plans major job cuts

After reporting a loss in its latest quarter, American cosmetics and fragrance giant Estée Lauder Companies plans to cut up to 7,000 jobs, representing over 11% of its total workforce, by next year. This move is designed to streamline operations and address market challenges, aiming for greater efficiency.

The New York-based company owns well-known brands such as MAC, La Mer, and Aveda. Sales have declined by 6%, and the company has lowered its profit forecast due to slower economic growth in China and South Korea, as well as global geopolitical uncertainties. Furthermore, trade relations between the U.S. and China have also negatively impacted the company's performance, adding to the financial strain.

Estée Lauder anticipates incurring restructuring and other charges of $1.2 billion to $1.6 billion (before taxes) as a result of the layoffs. As of June 30, 2024, according to the company's latest annual report, Estée Lauder has approximately 62,000 employees worldwide, highlighting the scale of the reduction.

Estée Lauder CEO Stephane de La Faverie stated, "We are significantly restructuring our business to be more streamlined, agile and faster." The company's latest quarterly sales were $4 billion, down from $4.28 billion in the same period last year, reflecting the current market pressures.

Estée Lauder currently expects earnings per share for this quarter to be between 24 cents and 34 cents, significantly lower than the 61 cents per share that Wall Street was expecting according to FactSet. Following this news, Estée Lauder's stock price on Wall Street fell nearly 15%, or $12.14, on Tuesday, demonstrating investor concern.