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Struggling Burberry Slashes 1700 Jobs, Stock Surges Instead

British luxury brand plans strategy shift, with job reductions and cost savings, according to Reuters report.

Upgrades in business approach for high-end British company: Reuters reveals potential layoffs and...
Upgrades in business approach for high-end British company: Reuters reveals potential layoffs and additional cost reductions.

Struggling Burberry Slashes 1700 Jobs, Stock Surges Instead

Burberry Slashes Jobs and Costs in Hundred-Million-Pound Restructuring Plan

Burberry's shares soared by 18 percent following the announcement of job cuts and extensive cost-saving measures. The British luxury brand aims to trim around 1,700 positions globally, equivalent to one-fifth of its workforce, according to Reuters.

Upcoming job losses mostly target office positions, including from the London headquarters and Yorkshire manufacturing facilities. Night shifts at the Yorkshire raincoat factory will be eliminated, while one shift at the Castleford trench coat factory will be discontinued, due to overproduction resulting from a two-shift operation.

From the CEO's Office

New Burberry CEO Joshua Schulman plans to reposition the brand with a renewed focus on its iconic trench coats and iconic scarves. Schulman, who joined the company last year, has emphasized the need to streamline and refocus on the brand's heritage.

The company anticipates saving approximately £100 million by 2027, achieved through a combination of cost-cutting measures and increased operational efficiency.

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A deeper dive (Optional, for context only if limits not exceeded)

Two-thirds of the planned job cuts will impact office-based positions, targeting excess operational costs and structures. The restructuring initiative is expected to generate additional £60 million in annual savings by 2027, on top of the previously announced £40 million cost-saving program.

The operational changes will also involve increased collaboration among Burberry's business units, a simplification of processes, and enhanced financial discipline to support growth opportunities. The total one-off restructuring costs associated with these programs are roughly £80 million, with £29 million recorded as an exceptional cost in FY25, with the remaining to be incurred in FY26.

Furthermore, the new strategy focuses on Burberry's core heritage products like trench coats and check-trimmed apparel. The rationale for this transition is to revitalize the brand's appeal and differentiate it in the competitive global luxury market, in response to previous management decisions that deviated from the brand's core identity, leading to a decline in sales and profitability.

  • What about the impact on the industry and finance, as Burberry implements its restructuring plan and aims to save £100 million by 2027?
  • In an effort to streamline the business and refocus on its core products like trench coats, Burberry's new CEO, Joshua Schulman, is planning to implement changes in the finance and labor sectors, cutting approximately 1,700 positions globally and eliminating night shifts at the Yorkshire raincoat factory.

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