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Estee Lauder to cut up to 1,200 jobs
[NEW YORK] US cosmetics giant Estee Lauder plans to cut between 900 and 1,200 jobs in a restructuring plan announced Tuesday as it reported modestly lower quarterly earnings.
The job cuts, which comprise about 2.5 per cent of Estee Lauder's workforce, are part of a restructuring effort to save US$200 to US$300 million annually.
Estee Lauder also said it plans to retrain and redeploy some employees, in part to invest in new products, social media and digital sales.
"Reallocating resources to new capabilities and higher-growth areas, and lowering our cost base will regrettably include selective workforce reductions in certain areas of the company," said chief executive Fabrizio Freda in a statement.
"We will make difficult decisions about affected employees with sensitivity, consistent with the values of our company and will make a concerted effort to retrain and redeploy employees wherever possible." The restructuring is expected to cost Estee Lauder US$600-US$700 million in one-time charges.
Net income for the fiscal third quarter ending March 31 was US$265.6 million, down 2.4 per cent from the year-ago period. Sales rose 2.9 per cent to US$2.7 billion.
Shares fell 2.7 per cent to US$94.50 in pre-market trade.