Estee Lauder plans store closures, up to 2,000 layoffs


Estee Lauder plans store closures, up to 2,000 layoffs
Estée Lauder, feeling the financial effects of the coronavirus, announced major changes, including up to 2,000 layoffs. (Source: CNN/file)

(Gray News) - Estée Lauder, feeling the financial effects of the coronavirus, announced major changes, including up to 2,000 layoffs.

The cosmetic giant said at least 10% of its stores will be closing. A list of store closures is not yet available.

Company officials said the pandemic has affected the bottom line and announced a two-year plan, called Post-COVID Business Acceleration Program to adjust its investments. This plan is expected to begin during the first quarter of 2021.

Estée Lauder said the layoffs are expected to affect about 3% of its workforce, “primarily point of sale employees and related support staff in the areas that were the most disrupted.”

About 20% of the company’s retail stores in the Americas that closed at the beginning of the pandemic in March were still closed by the end of June.

The beauty company said it will also focus on expanding its digital capabilities, advertising and promotions.

Beyond the initial restructuring costs, the plan is expected to save the company $300 million to $400 million, before taxes.

Fabrizio Freda, president and Chief Executive Officer said, “In this new fiscal year, we remain focused on the safety and well-being of our employees and consumers. Our sense of urgency to act on our recently announced racial equity commitments is strong. We enter fiscal 2021 with cautious optimism, given the vibrancy of our skin care portfolio, acceleration in Asia/Pacific, momentum online globally, and robust innovation pipeline...”

Copyright 2020 Gray Media Group, Inc. All rights reserved. CNN Newsource contributed to this report.