Estée Lauder (NYSE: EL) shares have fallen after the group revealed plans to close stores and axe 2,000 jobs.
After a slump in profits and sales at the beauty company, Estée Lauder hopes to save $400m (£300m) a year.
Net profits fell by over 50% in the year to June, despite the group saving money on advertising and travel during the pandemic.
The jobs most likely to be affected by the cuts will be in store and support roles. In total, 3% of the global workforce will be affected. Of the group’s freestanding stalls, between 10 and 15% will be axed.
Sales of skincare have remained resilient during the pandemic, with sales up. However, makeup, haircare, and fragrance fell.
Since the lockdown, there has been a change to makeup sales. Emma Fishwick, Account Manager, NPD UK Beauty, explained: “The popularity of eye makeup can be attributed to increased experimentation at home and wearing make-up whilst socialising with family and friends virtually or during conference calls with colleagues.”
For Estée Lauder, record sales and earnings growth in the first half of the financial year, which were then hit by the pandemic.
Estée Lauder shares (NYSE: EL) are trading -6.83% at 198,27 (0824GMT).
