Estée Lauder Cos. has announced plans to eliminate as many as 3,000 additional positions and generate a further US$200 million in savings as part of an intensified turnaround strategy. The owner of luxury brands such as La Mer and the Ordinary revealed on Friday that the total number of roles to be cut will now reach up to 10,000, up from the previous target of 7,000 set a year ago. The company employs approximately 57,000 people globally, according to its website.
Restructuring and Online Shift
Some of the job reductions stem from Estée Lauder’s efforts to reduce staffing at U.S. department stores, as CEO Stéphane de La Faverie aims to shift more sales to faster-growing online channels such as Amazon.com and TikTok Shop. The CEO, who assumed his role in January 2025, is striving to overhaul the conglomerate after three consecutive years of declining annual sales. With the latest cuts, he expects to generate up to US$1.2 billion in pre-tax annual savings to reinvest in the company’s revitalization.
Market Reaction and Financial Outlook
Following the announcement, Estée Lauder’s shares rose as much as 13%. However, the stock had declined 27% earlier this year, compared with a roughly 5% gain in the S&P 500 Index. RBC Capital Markets analyst Nik Modi commented in a research note that the results confirm “the worst is in the rear view mirror as restructuring activities are bearing fruit, and the business is steadily moving in the right direction.”
The company raised its profit outlook for the remainder of the fiscal year, signaling that the turnaround is gaining traction. Adjusted earnings per share are now expected to be in the range of US$2.35 to US$2.45, above analyst estimates. In February, Estée Lauder had guided for a range of US$2.05 to US$2.25. Organic net sales growth is projected at 3%, at the high end of the previous forecast.
Merger Talks with Puig
Regarding a proposed merger with Spanish beauty giant Puig Brands SA, a company executive told analysts during a conference call that no additional information would be provided “ahead of an official announcement detailing an agreed upon transaction or a termination of discussions.”
Stock Performance and China Sales
Estée Lauder’s shares surged nearly 60% in the year following De La Faverie’s appointment, driven by investor optimism about his turnaround efforts. However, the stock has slumped in 2026, weighed down by disappointing February results and ongoing merger talks with Puig. For the next fiscal year ending June 2027, the company expects organic net sales growth of 3% to 5%, in line with analyst expectations of 3.7%.
In its latest quarter, organic net sales in China rose 6%. Rivals such as L’Oréal SA, Procter & Gamble Co., and LVMH have also reported strong sales of high-end cosmetics in the region, raising hopes that Estée Lauder is making progress in a market where it has previously underperformed.
