Estée Lauder, the beauty conglomerate behind renowned cosmetics labels like Clinique, MAC, and Jo Malone, is now cutting double the number of jobs originally planned, citing concerns over the unpredictability of US President Donald Trump's tariffs.
The American multinational was already in the process of restructuring due to declining performance and now anticipates up to 7,000 job losses.
The global trade environment has become more challenging following Trump's initiation of import taxes, though tariffs affecting Canada and Mexico were halted last minute.
Faced with the necessity to save about $1 billion to navigate economic risks, including the potential impact of tariffs and sanctions, Estée Lauder, which also owns Bobbi Brown, Aveda, and Tom Ford, is undergoing significant operational changes to increase efficiency.
CEO Stéphane de La Faverie remarked, We are significantly transforming our operating model to be leaner, faster, and more agile.
The company attributes rising costs to inflation and sources its ingredients from various countries while operating in multiple nations. The escalation of tariffs could lead to additional taxes on cross-border goods, affecting its presence in over 150 countries.
Estée Lauder, employing approximately 62,000 individuals globally, expects job cuts between 5,800 and 7,000, with some employees being reassigned.
Details of the job cuts were not disclosed, though it employs around 4,400 individuals in the UK and Ireland.
Despite reporting a $590 million loss in the quarter ending December, Estée Lauder remains one of several companies apprehensive about the repercussions of trade disputes, following Diageo's caution on potential tariffs impacting its renowned beverage brands such as Guinness and Johnnie Walker.
Amidst trade tensions, some consumer brands face direct consequences, like PVH, the parent company of Calvin Klein and Tommy Hilfiger, being designated by China in a restrictive list, potentially resulting in sanctions and business impediments in the Chinese market.