Where DID Estée Lauder go wrong? Celebrity favorite behind make-up brands Bobbi Brown, Clinique and The Ordinary to slash 3,000 jobs amid dwindling sales

Estée Lauder is cutting about 3,100 jobs as sales at duty-free stores plummet and sales in China lag.

The cosmetics giant announced the layoffs Monday morning, sending shares up nearly 16 percent in pre-market trading – the highest level since November 2011. By Monday afternoon they were up 12 percent.

It comes as part of a massive restructuring at the company whose brands include Bobbi Brown, Clinique and The Ordinary.

The company said it expects the restructuring to cost between $500 million and $700 million, consisting of contract terminations, asset write-downs and other costs.

Estée Lauder has struggled to compete with French rival L’Oréal, which owns popular skincare brands CeraVe and LaRoche-Posay.

Estée Lauder has struggled to compete with French rival L’Oréal, which owns popular skincare brands CeraVe and LaRoche-Posay. Pictured: Elizabeth Hurley holding a bottle of Estee Lauder fragrance at an event in New York in 2001

The cosmetics giant announced the layoffs Monday morning, sending shares up nearly 16 percent in pre-market trading – the most since November 2011. By Monday afternoon they were up 12 percent.

In an earnings report released today, Estée Lauder said it earned $4.28 billion in the second financial quarter ended December 31. It represented a decline of 7 percent compared to profits in the same period last year.

Officials said this was largely due to slow international sales.

A statement from Chief Executive Officer Fabrizio Freda said: “While travel retail in mainland China and Asia declined, these companies are poised to return to organic sales growth in the second half.”

Estée Lauder was launched in 1946 by its eponymous founder with just four skin care products sold to local salons and hotels. Today it has more than 1,600 stores in 150 countries.

Over the years it has had its fair share of celebrity ambassadors, including Kendall Jenner, Karlie Kloss and Gigi Hadid.

But experts pointed out that the brand has lacked innovation from its competitors in recent years.

Dana Telsey of Telsey Advisory Group wrote in a research note on Monday: “Efforts to maintain innovation and brand warmth across the extended brand portfolio remain a concern.”

In its most recent quarter, Estée Lauder’s fragrance sales outpaced other categories, such as skin care.

Estée Lauder was launched in 1946 by its eponymous founder (pictured with model Paulina Purizkova)

In an earnings report published today, Estée Lauder said it earned $4.28 billion in the second financial quarter ended December 31. It represented a decline of 7 percent compared to profits in the same period last year.

The company owns a large number of brands, including Bobbi Brown, Clinique and The Ordinary, among others

The company is the latest in a long line to announce job cuts this year.

In January, Macy’s announced it would lay off 2,350 employees (about 3.5 percent of its total workforce) and close five stores.

And today, Snapchat owner Snap announced it would cut about 528 employees — or 10 percent of its global workforce.

Google, Amazon and Microsoft have also all announced layoffs to reduce costs by 2024.

Tracking website Layoffs.fyi estimates that nearly 32,000 employees have been laid off at 122 tech companies since the start of the year.

The technology sector also lost 168,032 jobs in 2023 and was responsible for the highest number of layoffs of any sector, according to a report from Challenger, Gray and Christmas earlier this month.