Layoff News: British Luxury Brand Burberry To Cut 1,700 Jobs; To Slash 20% Of Global Workforce

Burberry, a British luxury brand, share prices rose by 18% on Wednesday after it announced layoffs of 1,700 employees, i.e., 20% of its global workforce, to revitalize performance benchmarked against its luxury rivals.

The brand was adversely affected by unsuccessful product launches, excessive price hikes, and widespread luxury downturn.

The previous CEOs, like Marco Gobetti, hired designer Riccardo Tisci, who pivoted the company’s focus to the top end of luxury fashion and was financially unremarkable.

Akeroyd emphasized higher-margin leather accessories and on designer Daniel Lee, which did not reap the expected results.

Joshua Schulman was the fourth CEO in the last 10 years, showcasing shifting dynamics and a lack of investor confidence in the group.

Burberry Layoffs and Other Strategies

Under its new leadership, Schulman introduced strategies to reverse years of lagging performance. One such strategy was implemented using job cuts mainly affecting office roles and night shifts at Burberry’s factories in Castleford, England, as they were leading to overproduction.

"We do feel, wherever tariffs end up, that we have the levers to mitigate it," she added, saying cost-cutting would help.” Burberry’s Chief Financial Officer Kate Ferry told Reuters.

Cancelling of the night shifts was imperative to optimizing Burberry’s costs, according to Schulman. He spearheaded the company’s marketing towards a more British-oriented aesthetic, trench coats, and scarves.

Burberry 2024-25 Financials

With new strategies in place, the company secured an operating profit of 26 million pounds, overshooting expectations of 11 million pounds. Although its gross profit barely avoided entering the negative limits.

Revenue during the year was slightly higher than the expected 2.457 billion pounds at 2.461 billion pounds.  Its Q4 sales performed better at a 6% decline compared to the forecasted 7% decline.

Sales in the Americas, Europe, the Middle East, India, and Africa declined by 4% compared to last year, while Asia-Pacific showed bleaker results with a 9% decline. Despite the strategies, challenges remain ahead in the US market, which makes up a significant chunk of its business at 19%, reported by Ferry.

"As we got into Q4, the U.S. customer was keeping their momentum but ... things got a little choppy as we headed into February, particularly in the U.S. market," Schulman told Reuters.

Burberry showcases recovering financials in a year where it has implemented new strategies under new leadership, when it is reported that other luxury brands like Gucci have reported weakness due to a stark decline in US consumer demand.

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