Estée Lauder To Cut 3,000 More Jobs As Ceo Pushes Overhaul

Estée Lauder Cos. plans to cut as many as 3,000 more jobs and generate a further US$200 million of savings to help boost its turnaround plan.

The owner of the La Mer and the Ordinary brands said Friday as many as 10,000 roles will now go, up from its previous target of 7,000 announced a year ago. Estée Lauder has a global workforce of about 57,000, according to its website.

Estée Lauder’s shares rose as much as 13 per cent. The stock had fallen 27 per cent this year, compared with a gain of about five per cent for the S&P 500 Index.

The results confirm that “the worst is in the rear view mirror as restructuring activities are bearing fruit, and the business is steadily moving in the right direction,” RBC Capital Markets analyst Nik Modi wrote in a research report.

Some of the job cuts reflect Estée Lauder’s push to reduce staff at United States department stores, as chief executive Stéphane de La Faverie aims to shift more sales online to faster-growth channels such as Amazon.com and TikTok Shop.

The CEO, who took over in January 2025, is trying to overhaul the conglomerate after three years of annual sales drops. With the latest job cuts, he will have as much as US$1.2 billion before taxes in annual savings to invest in the revamp.

Estée Lauder raised its profit outlook for the remainder of the fiscal year — a sign the turnaround is progressing — but gave no additional details about a proposed merger with Spanish beauty giant Puig Brands SA.

A company executive told analysts during a Friday morning conference call that it won’t “provide any further information ahead of an official announcement detailing an agreed upon transaction or a termination of discussions.”

The owner of the Tom Ford and Aveda brands expects adjusted earnings per share in the range of US$2.35 to US$2.45. That is above analyst estimates. In February, Estée Lauder guided for a range of US$2.05 to US$2.25.

Organic net sales growth is expected to be three per cent, the company said, which is at the high end of the range it provided in February.

Estée Lauder’s shares surged nearly 60 per cent in the year or so after De La Faverie — a longtime company insider — became CEO, buoyed by investor optimism that he was making headway turning around the cosmetics conglomerate .

But they have slumped in 2026, dragged down by results in February that disappointed investors and by the ongoing talks with Puig.

China Sales

For the next fiscal year, which runs to June 2027, Estée Lauder said it expects organic net sales to be in the range of three per cent to five per cent. Analysts expect 3.7 per cent.

It also said organic net sales in China rose six per cent in its latest quarter. Rivals L’Oréal SA, Procter & Gamble Co. and LVMH said in recent earnings reports their higher-end cosmetics had sold well there, raising expectations for Estée Lauder to show progress in a region where it has underperformed.

But sales in the Americas, which includes the U.S. , were flat in the three months through March 31. Estée Lauder has struggled on its home turf in part because of tough competition from the plethora of cosmetics startups.

De La Faverie is trying to solve that problem by launching more new products, more quickly, among other measures.

By category, fragrance sales were up 10 per cent in its most recent quarter, while skincare, makeup and haircare were flat.

The CEO also needs to convince Wall Street that the deal with Puig, if it materializes, isn’t a distraction from his own turnaround plan.

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While some on Wall Street say it makes strategic sense, many see it as a risk clouding Estée Lauder’s outlook. On Friday, the company didn’t mention the deal. Puig said this week negotiations are continuing.

The deal has “clear strategic logic given Puig’s strength in fragrance, faster growth, higher margins,” Raymond James analyst Olivia Tong said in a recent note. “However, we are cautious on EL’s ability to successfully execute a transaction of this scale while still in the midst of its own turnaround.”

Estée Lauder also reported a US$84 million loss contingency after it settled securities class action litigation in the U.S. District Court for the Southern District of New York. The lawsuit had alleged the company concealed relying on gray-market sales in China during the COVID-19 pandemic.

—With assistance from Subrat Patnaik.

Bloomberg.com