Estee Lauder to cut 3,000 more jobs as CEO pushes overhaul

[NEW YORK] Estee Lauder plans to cut as many as 3,000 more jobs and generate a further US$200 million of savings to help boost its turnaround plan.

The owner of the La Mer and the Ordinary brands said on Friday (May 1) that as many as 10,000 roles will now go, up from its previous target of 7,000 announced a year ago. Estee Lauder has a global workforce of about 57,000, according to its website.

Shares in Estee Lauder rallied as much as 16 per cent in premarket trading in New York. As at the last close, the stock has fallen 27 per cent this year.

Some of the cuts reflect Estee Lauder’s push to reduce staff at US department stores, as chief executive officer Stephane de La Faverie aims to shift more sales online to faster-growth channels such as Amazon.com and TikTok Shop.

The CEO, who took over in January 2025, is trying to overhaul the conglomerate after three years of annual sales drops. With the latest job cuts, he will have as much as US$1.2 billion before taxes in annual savings to invest in the revamp. 

Estee Lauder raised its profit outlook for the remainder of the fiscal year – a sign the turnaround is progressing – but gave no additional details about a proposed merger with Spanish beauty giant Puig Brands.

The owner of the Tom Ford and Aveda brands expects adjusted earnings per share in the range of US$2.35 to US$2.45. That is above analyst estimates. In February, Estee Lauder guided for a range of US$2.05 to US$2.25.

Organic net sales growth is expected to be 3 per cent, the company said, which is at the high end of the range it provided in February. 

Estee Lauder’s shares surged nearly 60 per cent in the year or so after De La Faverie – a long-time company insider – became CEO, buoyed by investor optimism that he was making headway turning around the cosmetics conglomerate.

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But they have slumped in 2026, dragged down by results in February that disappointed investors and by the ongoing talks with Puig.

China sales

For the next fiscal year, which runs to June 2027, Estee Lauder said it expects organic net sales to be in the range of 3 per cent to 5 per cent. Analysts expect 3.7 per cent.

It also said organic net sales in China rose 6 per cent in its latest quarter. Rivals L’Oreal, Procter & Gamble and LVMH said in recent earnings reports their higher-end cosmetics had sold well there, raising expectations for Estee Lauder to show progress in a region where it has underperformed. 

But sales in the Americas, which includes the US, were flat in the three months through Mar 31. Estee Lauder has struggled on its home turf in part because of tough competition from the plethora of cosmetics startups.

De La Faverie is trying to solve that problem by launching more new products, more quickly, among other measures.

By category, fragrance sales were up 10 per cent in its most recent quarter, while skincare, makeup and haircare were flat.

The CEO also needs to convince Wall Street that the deal with Puig, if it materialises, isn’t a distraction from his own turnaround plan.

While some on Wall Street say it makes strategic sense, many see it as a risk clouding Estee Lauder’s outlook. On Friday, the company didn’t mention the deal. Puig said this week negotiations are continuing.

The deal has “clear strategic logic given Puig’s strength in fragrance, faster growth, higher margins”, Raymond James analyst Olivia Tong said in a recent note. “However, we are cautious on Estee Lauder’s ability to successfully execute a transaction of this scale while still in the midst of its own turnaround.”

Estee Lauder also reported a US$84 million loss contingency after it settled securities class action litigation in the US District Court for the Southern District of New York. The lawsuit had alleged the company concealed relying on gray-market sales in China during the Covid-19 pandemic. BLOOMBERG