Cosmetics company Estee Lauder announced on Monday that it will cut up to 5% of its global workforce as part of a restructuring plan.
The company, which employs about 62,000 people worldwide, said the layoffs will affect up to 3,000 positions.
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Estee Lauder said the cuts stem from a new restructuring program focused on "the reorganization and rightsizing of certain areas of the Company as well as the simplification and acceleration of processes." It will begin during the company's fiscal third quarter.
The company expects to incur restructuring and other charges of between $500 million and $700 million, before taxes.
It projected the restructuring will bring annual pre-tax gross savings in the $350 million to $500 million range for the cosmetics company.
The restructuring plan marked an expansion of its "profit recovery plan" for fiscal years 2025 and 2026 that the cosmetics company started pursuing in November.
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Estee Lauder’s second-quarter earnings report included $4.28 billion in net sales and $313 million in net earnings. It tied its net sales, which posted a high single-digit-percent decline, to softness in China and business disruptions in the Middle East.
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CEO Fabrizio Freda said the "now-larger plan will better position the Company to restore stronger, and more sustainable, profitability while also supporting sales growth acceleration and increasing agility and speed-to-market."
With the restructuring, the company’s profit recovery plan is projected to result in $1.1 billion to $1.4 billion in incremental operating profit benefits, the company said.
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"The company remains optimistic about the long-term prospects and future growth opportunities in global prestige beauty," Estee Lauder said, adding it will boost its investments in the "strong equity and desirability of its brands" for growth.
Some popular brands under Estee Lauder include Mac, Clinique, Too Faced and Bobbi Brown.
