Estée Lauder: to lay off 3% to 5% of workforce

(CercleFinance.com) - On Monday Estée Lauder announced its intention to cut between 3% and 5% of its workforce as part of a vast restructuring plan designed to reduce costs and revitalize margins.


The US cosmetics group states that the program should result in charges of $500m to $700m, before generating annual savings of between $350m and $700m.

This announcement comes as the company's sales fell by 7% to $4.28bn in Q2 to end-December.

On an organic basis, sales contracted by 8% over the quarter.

Net income fell to $313m, compared with $394m a year earlier.

As a result of this disappointing performance, the New York-based group is now targeting EPS of $2.04 to $2.20 for the current financial year, compared with $2.08-$2.23 previously.

With a workforce of 62,000 at the end of the last financial year, the redundancy plan is expected to involve between 1,900 and 3,200 positions.

The share price was bubbling, up 17% in pre-market trading following these announcements.


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