Burberry to cut 1/5 of its workforce globally as profits plunge, costs rise

Business Standard

15-05-2025

British luxury brand Burberry has announced plans to cut around 1,700 jobs globally by 2027 in a sweeping cost-cutting move following a dramatic fall in profits. The decision includes shutting down the entire night shift at its trench coat factory in Castleford, Yorkshire, which could affect about 170 skilled workers, reported The Guardian.
The company made the announcement on Wednesday after reporting a 117 per cent drop in annual pre-tax profits, recording a £66 million loss — a sharp fall from £383 million in profit the previous year. Burberry's troubles mirror a wider slowdown in the global luxury fashion market.
The job cuts are part of a new plan to save £60 million, and they could impact nearly a fifth of Burberry's 9,300-strong global workforce.
Castleford factory hit hard
One of the most affected sites will be the historic Castleford trench coat factory, where the night shift will be removed. The move, which affects around 170 jobs, will be implemented before a major investment is made in the site later this year, according to Schulman.
'For a long time we have had overcapacity at that facility and that's simply not sustainable at this point,' Schulman said. 'We are making this change to safeguard our UK manufacturing and will be making a significant investment in renovating the Victorian factory [later this financial year].'
He added that Burberry still sees value in UK manufacturing and expressed a long-term goal to increase production capacity in Britain, where its iconic trench coats are made.
'We have an ambition to grow UK production over time and believe in the tradition of making trench coats right here in the UK,' he said.
However, the news was met with concern in Castleford. Darren Travis, an organiser for the GMB union, which represents workers at the site, called the decision devastating:
'This is a sad, sad blow for these workers and Castleford itself. Burberry is the town's biggest employer and more than a quarter of the workforce are going,' he was quoted as saying by The Guardian.
A brand in transition
Burberry, known globally for its signature trench coats, has faced ongoing challenges — from weak demand in luxury fashion to brand instability caused by frequent changes in creative leadership. Schulman, who joined as CEO last year after leading Coach in the US, was brought in to revive the company's fortunes.
One role that remains secure is that of Chief Creative Officer Daniel Lee, whose position had been considered vulnerable under the new leadership.
Market reacts positively
Wednesday's announcement follows a previous £40 million cost-saving plan announced in November. Investors responded positively to the latest move, with Burberry shares rising by 17 per cent on the London Stock Exchange after the update.
The company is now focusing on moving from what Schulman called 'modern British luxury' to a more timeless, sustainable version of the brand — an effort many in the industry will be watching closely.