Everything we know about Estée Lauder Companies’ job cuts, results and profit recovery plans

By Alessandro Carrara | Published: 4-Feb-2025

ELC’s new President and CEO Stéphane de La Faverie, who stepped into the role in January, has also unveiled his vision to restore the company’s sales growth

It has been a tumultuous start to 2025 for the Estée Lauder Companies (ELC), with a significant c-suite shake-up, a new CEO and a rocky first quarter of trading.

This has continued into Q2, with the Clinique-owner reporting lacklustre sales brought down in part due to challenging trading conditions in Asia.

But ELC also revealed it will be cutting over 7,000 jobs as part of a restructuring plan that aims to improve profitability.

Here is everything Cosmetics Business knows, so far, about the large-scale changes happening at the beauty giant, and what to expect going forward.

Financial update

ELC has announced a restructuring plan to help improve profitability

ELC has announced a restructuring plan to help improve profitability

Net sales slumped by 6% to US$4bn during the three months ended 31 December 2024, while gross profit also sank by 2% to $3bn.

ELC’s skin care division saw some of the largest declines during the quarter, with sales decreasing by 12% to $1.9bn

This was the result of challenging retail environments in the Asia Pacific market and the company’s Asia travel retail business.

Ongoing pressure from subdued sentiment from Chinese consumers also drove declines from the brands Estée Lauder and La Mer.

Make-up net sales also decreased by 1%, primarily due to the declines from the Tom Ford brand due to Asian market challenges.

MAC and Smashbox saw softer demand in the eye and face subcategories, respectively.

The declines in cosmetics were partially offset by high-single-digit growth from Clinique, reflecting growth across each geographic region.

This was driven by the brand’s launch in Amazon’s US Premium Beauty Store and the continued success of Almost Lipstick in Black Honey.

Hair care sales decreased 8%, primarily driven by Aveda, and reflected lower demand for ELC’s salon operations and shipment timings.

Fragrance bucked the overall sales declines, climbing by 2% thanks to sales of Le Labo.

However, the fragrance category’s operating results ultimately decreased during the quarter.

This was attributed to a $549m asset impairment relating to Tom Ford.

Job Cuts

Estée Lauder Companies’ Ronald S Lauder retired from the board of directors in January 2025

Estée Lauder Companies’ Ronald S Lauder retired from the board of directors in January 2025

In the wake of two consecutive quarters of sales declines, ELC has announced a restructuring plan to help improve profitability.

This includes plans to cut jobs of between 5,800 to 7,000, which are expected to be completed by the end of fiscal 2026.

“This net reduction takes into account the elimination of positions after retraining and redeployment of certain employees in select areas,” ELC said in a statement.

This forms part of the brand owner’s now expanded restructuring aims to streamline business operations and improve income by up to $1bn.

This could also see the business incur charges of between $1.2bn and $1.6bn.

But in the longer term, ELC anticipates these changes to “help restore operating margin and also fuel reinvestment in consumer-facing areas to drive sustainable sales growth”.

The Future of Estée Lauder Companies 

Tom Ford is owned by Estée Lauder

Tom Ford is owned by Estée Lauder

In November 2024, ELC confirmed that Stéphane de La Faverie would become the successor to long-time President and CEO Fabrizio Freda.

La Faverie stepped into the role on 1 January 2025 and is working alongside Freda until 2026 to “ensure a seamless transition”.

And, despite being just a month into the role, ELC’s new top boss has wasted no time trying to correct the company’s trajectory.

Alongside both the Q2 trading update and restructuring plans, La Faverie has announced ‘Beauty Reimagined’.

The scheme has been described as a “bold strategic vision to restore the company’s sustainable sales growth and achieve stronger profitability”.

"Today, we are excited to launch Beauty Reimagined, a bold strategic vision to restore sustainable sales growth and achieve a solid double-digit adjusted operating margin over the next few years as we aim to become the best consumer-centric prestige beauty company," said La Faverie.

"We are significantly transforming our operating model to be leaner, faster, and more agile while taking decisive actions to expand consumer coverage, step-change innovation, and increase consumer-facing investments to better capture growth and drive profitability.”

Beauty Reimagined’s main action plans include accelerating ELC’s “best-in-class consumer coverage”.

This essentially means the business will be expanding its portfolio in favour of demand-led products and categories.

ELC will also increase its visible advertising spending, as well as optimise marketing programmes and eliminate low-return marketing activities. 

Other changes include fuelling sustainable growth through “bold efficiencies” and addressing the impact of further volume declines.

The business claimed it would achieve this by adopting a more competitive approach to procurement by further consolidating spending.

It will also strategically evaluate key supplier relationships and aims to improve its supply chain network efficiencies.

“Together with our talented employees, fundamental values and incredible brands, Beauty Reimagined positions us to lead the prestige beauty industry once again,” added La Faverie.

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