Estée Lauder Cutting 7,000 Jobs Amid Lagging Sales in Asia

February 4, 2025 TruthUSA

Estée Lauder will eliminate up to 7,000 jobs under its expanded restructuring plan and new president amid subdued consumer sentiment in Asia.

Estée Lauder CEO and President Stéphane de La Faverie began leading the cosmetics giant on Jan. 1.

“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,” Faverie said in a Feb. 4 statement.

The restructuring, under the company’s Profit Recovery and Growth Plan, was implemented to offset lagging beauty sales in Asia, where net sales decreased by 11 percent in mainland China, South Korea, and Hong Kong.

“Operating income decreased, primarily driven by the decline in net sales and the year-over-year unfavorable impact of a change in policy related to local government subsidies in China,” the statement said.

The restructuring program aims to reorganize certain areas, simplify and accelerate processes, and focus more on outsourcing select services. The elimination of jobs is planned through the end of 2026 after “retraining and redeployment of certain employees in select areas.”

“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,” Faverie said.

Although Estée Lauder’s stock dropped on the news, Faverie hung the brand’s fate on Beauty Reimagined.

“Together with our talented employees, fundamental values, and incredible brands, Beauty Reimagined positions us to lead the prestige beauty industry once again,” he said.

An earnings report shows that Estée Lauder, the parent company of Clinique and MAC Cosmetics, experienced an operating loss of $580 million, or $1.64 per share, and revenue fell by 6 percent year over year, to $4 billion. Sales in its skin care business fell by 12 percent to $1.92 billion, while make-up sales declined by 1 percent to $1.15 billion.

On the upside, perfume sales increased by 1 percent to $744 million.

Citing “evolving global geopolitical uncertainty” in its third-quarter 2025 fiscal outlook, Estée Lauder expects an adjusted profit of $0.24 to $0.34 per share.

In a separate online statement, Faverie announced a new executive team, which includes Matthew Growdon, who will lead an “evolved” Asia-Pacific region, excluding mainland China. Joy Fan will continue to lead the business in mainland China.

“To deliver our action plan priorities, I am pleased to announce my new Executive Team and structure, reflecting the need to create a flatter, leaner organization, and simplified operations across the business to better serve our consumers,“ Faverie said. ”Through a combination of elevating top talent internally and recruiting externally, we will make decisions with greater speed and agility, breaking down silos and allowing us to develop a leadership bench for the future.”

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