The U.S Cosmetic giant Estee Lauder plans to layoff 1500 to 2000 jobs or about 3% of its workforce globally. The company also plans to close about 15% of its brick and mortar stores.
Posting its low quarterly earnings, the company stated travel restrictions and store closures due to the spread of coronavirus as the reason for dampened demand for its premium makeup brands.
The pandemic has reduced the demand for the New York-based company’s foundations and lip products such as M.A.C. Consumers are ordering more skincare products than makeup. Overall annual sales for its makeup brands fell 18%. This has made Estee Lauder reassess its business plans – to invest in new products, social media, and online sales.
“Reallocating resources to new capabilities and higher-growth areas and lowering our cost base will regrettably include selective workforce reductions in certain areas of the company,” said chief executive Fabrizio Freda in a statement.