The Estée Lauder Companies Inc. has announced major workforce reductions as it expands its restructuring efforts in response to declining sales. The cosmetics giant confirmed that it has already approved cost-cutting measures affecting more than 2,600 positions, with plans to eliminate between 5,800 and 7,000 jobs globally by the end of fiscal 2026.

The layoffs are part of Estée Lauder’s expanded Profit Recovery and Growth Plan (PRGP), which the company launched in February to stabilize profitability and reshape its operating model. The restructuring aims to streamline operations, simplify processes, and shift resources toward high-growth areas such as marketing and consumer engagement.

The announcement comes alongside disappointing quarterly results, with net sales down 10% to $3.6 billion and organic sales declining 9%. Despite the revenue drop, gross margin rose 310 basis points to 75.0%, a gain the company attributes to early benefits from the restructuring plan.

The PRGP includes a projected $1.2 to $1.6 billion in restructuring and related charges, primarily covering employee-related costs, contract terminations, and asset write-downs. The company anticipates that the plan will yield $800 million to $1 billion in annual gross benefits before taxes.

“As of April 24, we’ve approved initiatives representing $623 million in charges,” the company stated, noting that not all affected employees will be laid off immediately. Some workers may be retrained or redeployed in select roles, though the overall goal remains to “rightsize” the workforce and accelerate business transformation through outsourcing and go-to-market optimization.

Chief Executive Officer Stéphane de La Faverie expressed confidence in the long-term impact of the restructuring, saying, “We are confident in our ability to return to sales growth in fiscal 2026.”

The job cuts are expected to affect a wide range of departments, including administrative functions, sales, and support operations, though Estée Lauder has not provided specific details on geographic or divisional breakdowns.

As businesses across sectors continue to grapple with market volatility, Estée Lauder’s move reflects a broader trend of workforce realignment and operational streamlining. The full implementation of the restructuring plan is expected to conclude by the end of fiscal 2027.
 

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