Moet Hennessy to cut 10% of workforce as luxury slowdown bites
Moet Hennessy will cut its workforce by more than 10 per cent as the newly installed executives at LVMH's weakest division seek to reinvigorate its performance.
Jean-Jacques Guiony, Moet Hennessy chief executive, and his deputy Alexandre Arnault told staff at the wine and spirits division last week that they planned to cut the workforce back to 2019 levels.
Current headcount of 9,400 would need to be reduced by about 1,200, Guiony said, adding that the division's revenues were at 2019 levels even though costs had increased by 35 per cent since then.
'This was an organisation that was built for a much larger size of business,' Guiony said, in an internal video seen by The Financial Times. 'People realise . . . that this [rebuilding sales] is not going to happen anytime soon.'
The reductions would largely be achieved through natural attrition and moving some staff into vacancies in other parts of the organisation, said Guiony and Arnault. They did not give a timeline for the job cuts, which were first reported by French news outlet La Lettre.
A Moet Hennessy spokesperson said: 'While Moet-Hennessy's business has returned to its 2019 level, Moet-Hennessy announced yesterday its intention to adjust its organisation and gradually return to its 2019 staffing levels, primarily by managing its natural turnover and not filling vacant positions.'
Guiony and Alexandre Arnault, son of Bernard, LVMH's chief executive and chair, arrived at Moet Hennessy in February with a mandate to improve performance amid a depressed global market for alcohol sales.
LVMH's drinks division grew rapidly between 2019 and 2022 but has been under pressure since. Moet Hennessy's organic sales fell 9 per cent in the first quarter, compared with a 3 per cent drop across LVMH as a whole.
Alexandre Arnault told staff that LVMH had seen a few crises over the years but what made this a 'bit unique' was that all of its biggest divisions were struggling at once.
'Usually at LVMH when wines and spirits are not going well, fashion is doing well or some [other part of the business] is performing differently. Right now things are not going extremely well,' he said.
Internal company documents, seen by the Financial Times, show that headcount reductions were on the agenda at Moet Hennessy before its current leadership was in place.
Hiring freezes have been in place since the second half of 2023 and managers were looking to cut hundreds of roles last year. At least 70 out of a target of about 100 people were let go in China in 2024, according to communications seen by the Financial Times.
'Things are bad but they will become better. This is a cycle,' Guiony told staff, adding that US tariffs added another layer of uncertainty.
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