Burberry plans to reduce its global workforce by 18% by 2027 as part of an effort to cut costs and revive its struggling business. The British luxury fashion brand announced on Wednesday that approximately 1,700 jobs could be impacted, following a £3 million ($4 million) loss for the most recent financial year. Revenue also dropped significantly for the 12 months ending March 29, according to the company’s preliminary results.
Like many other high-end fashion brands, Burberry has faced challenges due to a global slowdown in luxury spending, with its stock having fallen 66% since reaching an all-time high in April 2023.
The planned job reductions are part of a broader strategy to enhance the company’s efficiency and profitability, including other cost-saving measures. By the 2027 financial year, Burberry aims to achieve £100 million ($133 million) in annual savings. Following the announcement, the company’s stock rose by more than 9% on Wednesday morning.
In its results, Burberry acknowledged that “the current macroeconomic environment has become more uncertain” due to geopolitical factors, possibly referencing the trade war during President Donald Trump’s administration, which has driven up costs and made consumers more cautious in their spending.
Joshua Schulman, who took over as Burberry’s CEO last year, is leading the effort to turn the company’s fortunes around. He stated that Burberry is still in the early stages of this recovery process and is working against a challenging economic environment.
As part of its revival plan, Burberry has renewed its focus on the products it is most known for, such as trench coats and scarves, while also lowering prices on bags and shoes.
According to Susannah Streeter, a senior analyst at Hargreaves Lansdown, Burberry is facing tough conditions in the mid-market luxury sector, where it struggles to compete with its ultra-luxury competitors. Aspiring shoppers are also becoming more cautious, lacking the wealth to shield them from economic uncertainty.
