Burberry cuts 1,700 jobs amid cost-saving strategy, boosts shares
According to the BBC, the luxury clothing company Burberry has announced plans to eliminate approximately 1,700 jobs. This is intended to be part of a cost-cutting strategy by 2027. Following this announcement, the company's shares rose by 18%.
The British brand, known for its distinctive camel, red, and black check pattern, announced a savings plan due to incurring a loss of C$114 million in the last financial year.
Burberry to lay off 20% of workforce
The BBC reports that the proposed job cuts would affect 20% of all employees. Joshua Schulman, Burberry's CEO, indicated that the layoffs would impact global teams but would "naturally" focus on the UK, where most employees are based.
He confirmed that the workforce rotation would be reorganized and that the night shifts at the Castleford factory, which produces trench coats costing from about $1,685 CAD to $16,845 CAD each, would be eliminated.
For a long time we have had overcapacity at that facility, and that is simply not sustainable. But I want to be very clear that we are making this change to safeguard our UK manufacturing, and in fact we will be making a significant investment to renovate this factory in the second half, he argued.
Burberry stated it would adjust "schedules to peak traffic in stores" in its shops, which will also lead to some job reductions.
Shares rise after announcing cost-cutting plans
Savings will also come from operating costs, with increased efficiency in procurement and real estate expenditures. The company stated that the cuts are subject to consultation where applicable.
Reuters reports that after announcing the layoffs, Burberry's shares increased by 18%.
In November of last year, the brand announced a savings program worth about $67 million CAD, meaning it plans to generate annual savings of approximately $168 million CAD by spring 2027.
"While we are operating against a difficult macroeconomic backdrop and are still in the early stages of our turnaround, I am more optimistic than ever that Burberry’s best days are ahead and that we will deliver sustainable, profitable growth over time," assessed Schulman.
Burberry's sales are struggling with weaker demand for the entire luxury goods segment, and trade in China and the Americas experienced some of the most significant declines last year.
Burberry was founded in 1856 and has been producing its famous raincoats in Yorkshire since 1972.
Luxury alcohol giant to lay off 1,200 people
The drop in demand in key markets, namely the USA and China, has also forced other players to take drastic steps. Moët Hennessy, a renowned producer of luxury alcohols, is facing significant financial difficulties. In the first quarter of 2025, the company reported a revenue decline of 9%. This is the worst performance within the LVMH empire, owned by Bernard Arnault.
As a result, the company has decided to lay off over 10% of the workforce. This means around 1,200 people (from 9,400) will lose their jobs, returning to employment levels from 2019 (before the COVID-19 pandemic).
