Estée Lauder’s multi-million revenue sink causes thousands of job cuts

Estée Lauder has faced a US$590 million net earnings loss in the second quarter of 2025, which it attributes to rising inflation driving up costs. The prestige beauty company expects further hits as global trade tensions rise amid an evolving tariff stand-off.

Estée Lauder announced it would cut between 5,800 and 7,000 jobs to offset the financial loss. The company employs approximately 62,000 people worldwide but did not disclose in which regions the losses would take effect. The business already planned on restructuring before the job removal announcement. 

Second quarter fiscal 2025 revenues dropped 6% to US$4 billion from US$4.3 billion in the same period last year. Estée Lauder’s operating income swung from a US$574 million gain at this time last year to a US$580 million loss now.

Skin care, historically the company’s most lucrative sector, saw revenues down 12% to US$1.9. Sales in the Asia/Pacific region also fell 11% to US$1.3 billion. 

The third-quarter organic net sales are projected to decrease between 8% and 10% compared to last year. This morning, the company’s share price was down 5.08%. 

Trump’s tariffs

The US multinational cited Donald Trump’s tariff plans as a reason for the cuts.

The chief executive at Estée Lauder, Stéphane de La Faverie, said the company is bracing for “the risk of recession... including the imposition of tariffs and sanctions.” It aims to save approximately US$1 billion with the job reductions.

Estée Lauder creates skin care and makeup products.Estée Lauder sources ingredients worldwide, including Australia, Madagascar, and Indonesia. The beauty conglomerate has operational or development facilities in the UK, Canada, Switzerland, and China. Its products are sold in over 150 countries.

Under US president Trump’s tariffs, personal care products could have heightened taxes when crossing borders. Rumors of a trade war are circulating in the beauty industry as companies prepare for international tariff discussions.

Trump recently submitted to holding off imposing a 25% tariff on Canada and Mexico for 30 days. However, the president kept his tariff plan for China. 

Slow sustainable recovery 

Estée Lauder aims to return to “sustainable sales growth” and deliver a double-digit adjusted operating margin over several years. To do so, the company says it will increase investments in advertising and marketing.

The beauty company has also committed to focusing on innovation for new products, partially in luxury solutions, and to deliver these products faster to market. 

Estée Lauder owns personal care companies such as Jo Malone, The Ordinary and Le Labo. 

The Ordinary recently launched on Amazon Premium Beauty in the US and started an accessibility campaign to demystify the safety of common skin care ingredients.