Estée Lauder plans to cut up to 3,000 more jobs as part of a broader restructuring initiative, bringing the total potential job losses to 10,000. The company simultaneously raised its annual profit forecast, driven by improvements in luxury markets and a strategic shift towards digital and specialty retail channels. Shares surged in premarket trading following the announcement.
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Estée Lauder (EL) announced on Friday plans to cut up to 3,000 additional jobs globally as part of an accelerated restructuring plan, while simultaneously raising its annual profit forecast. This brings the total planned job reductions to between 9,000 and 10,000 positions, aiming for cost savings of up to $1.2 billion. Shares of the beauty giant jumped approximately 11% in premarket trading following the announcement.
The company, which owns Clinique and M.A.C, is also in discussions regarding a potential merger with Puig (PUIG-ES), the owner of Jean Paul Gaultier. Analysts suggest the merger could facilitate further job cuts as Estée Lauder streamlines operations. Over 70% of the additional job cuts will impact department store staff, as the company shifts its focus towards high-growth channels like Ulta (ULTA), Sephora, Amazon (AMZN), and TikTok Shop.
Estée Lauder’s “Beauty Reimagined” strategy, spearheaded by CEO Stephane de La Faverie, has focused on premium product launches and supply chain optimization, leading to improved sales in key luxury markets such as China and Europe. The company now projects full-year adjusted profit between $2.35 and $2.45 per share, an increase from its previous forecast of $2.05 to $2.25. Organic net sales are expected to grow at the high end of its prior 1% to 3% range.
However, the company cautioned that its forecast relies on a stable geopolitical environment and no further disruptions in the Middle East beyond May 2026. In its latest quarterly report, Estée Lauder exceeded expectations with sales of $3.71 billion (versus estimates of $3.69 billion) and adjusted profit of 88 cents per share (versus estimates of 65 cents).
