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Estée Lauder to eliminate up to 7,000 Jobs in corporate overhaul

Estee Lauder and Mac displays at a Nykaa store in New Delhi, India on Saturday, July 30, 2021. Nykaa has grown into India's top e-commerce site for beauty products, with the endorsement of Bollywood stars and a fervent following among twenty-somethings. The startup filed preliminary documents on Aug. 2 for an initial public offering, which Bloomberg News has reported could value the business at more than $4 billion. (Anindito Mukherjee/Bloomberg)

Estée Lauder Cos. said it plans to eliminate between 5,800 to 7,000 positions in a corporate restructuring as the company’s new chief executive officer attempts to execute his turnaround plan.

The owner of the Clinique and MAC brands projected revenue will fall more than expected in the current quarter but said it would hold off on providing a full-year financial outlook due to “evolving global uncertainty” in a statement on Tuesday.

The company is forecasting net sales to fall between 10% to 12% in the three months ending on March 31. Analysts had expected a 6.8% decline, according to an average of estimates compiled by Bloomberg.

The company also cited ongoing challenges in its duty-free business in Asia and subdued consumer sentiment in China and Korea, anticipating “continued volatility and low visibility in the near term.” Sales in the previous quarter met expectations.

The results underscore the challenges facing Stéphane de La Faverie, who took over as CEO on Jan. 1. He has been tasked by Estée Lauder’s board with reversing a deep sales slump.

The iconic beauty conglomerate has lost market share in the US and lost out to brands sold by competitor L’Oreal SA and smaller upstarts, which have been faster to react to social media trends. Estée Lauder’s sales in China have dropped.

The company’s shares were flat in premarket trading. The company’s stock has declined 45% over the last 12 months.

Faster, Better

“While we are not satisfied with our third quarter outlook, it primarily reflects weak retail sales trends in our Asia travel retail business, which deteriorated in our second quarter driven by Korea,” De La Faverie said. Sales in its duty-free business will decline in the current quarter by a “strong double-digit” percentage.

To reverse the slump, De La Faverie said Tuesday he will focus on gaining market share in the high-end cosmetics market by getting new products to shoppers faster and marketing them better. He’ll also expand the company’s existing turnaround plan to address a decline in sales volume since it was first announced by his predecessor, Fabrizio Freda, in Nov. 2023. And he pledged to trim costs by ending some supplier relationships and outsourcing some services, among other measures.

De La Faverie’s vision for reviving the company he now helms is similar to what Freda said he planned to do before he stepped down. The difference is that De La Faverie is expanding the size of the turnaround plan as well as changing the executives who will implement it.

De La Faverie plans to make changes to his executive team, with more details set to be announced Tuesday, according to a transcript of a video message from the CEO.

“We will rapidly expand our brand portfolio presence to win prestige beauty share and regain our leadership position as we focus on all high-growth areas,” De La Faverie said in his message. These areas include “geographies, channels, price tiers, categories and consumers,” he added.

“We will enable our small and mid-size brands to significantly accelerate growth, profitably,” he said, while pledging to “strengthen each of our large brands to be the undisputed leaders in their respective areas of business.”

De La Faverie and other company executives are scheduled to speak with analysts later on Tuesday. Wall Street will be keen to hear details about his plan, dubbed “Beauty Reimagined,” and more about how it differs from that of Freda.

Estée Lauder is working with Evercore Inc. to review its portfolio of beauty brands, which also includes Smashbox, Tom Ford and Aveda, Bloomberg News reported last month.

©2025 Bloomberg L.P.