Burberry to cut workforce by almost a fifth in cost-cutting drive

CNA

15-05-2025

Burberry has warned it could shed 1,700 jobs, about 18 per cent of its global workforce, by 2027 as the UK luxury brand announced new cost cuts in an effort to turn around the business.
The company, which appointed former Coach and Jimmy Choo chief executive Joshua Schulman last July to revive its fortunes, disclosed the plan as part of a push to generate an additional £60 million (US$80.06 million; S$103.88 million) of savings by 2027.
It came as Burberry said it had swung to an operating loss of £3 million in the 12 months to March 29, compared with a £418 million profit the year before. Revenue fell 17 per cent to £2.5 billion.
The latest cost-cutting drive would take the planned annual savings to £100 million a year. The company said the 'organisational changes' were meant to ensure Burberry was 'fit for the future'. Burberry's shares rose 6.9 per cent on the news, trimming the decline over the past year to 26 per cent.
The majority of the proposed cuts will be made in Burberry's offices globally, although there will also be redundancies in stores and at its Castleford factory in the UK, where it plans to remove the night shift.
'For a long time we've had overcapacity at that [UK] facility and that's simply not sustainable at this point,' Schulman said. However, he added that the changes were designed to 'safeguard our UK manufacturing' and it would invest 'significantly' in the factory in the coming months.
'Our intention is that we make our British heritage raincoats in the UK for many generations to come,' he said.
Schulman replaced Jonathan Akeroyd as chief executive after his attempt to move the brand upmarket and compete with high-end groups such as Hermes alienated shoppers. The brand has also had to contend with a broader slowdown in the global luxury market, particularly in China, the company's main growth engine.
Burberry's new chief executive said on Wednesday (May 14) that the brand was 'still in the early stages' of its turnaround, but that he was optimistic the company's 'best days are ahead' and that it would deliver 'sustainable, profitable growth over time'.
Retail sales fell by 6 per cent on a like-for-like basis in the final quarter of the company's financial year, slightly better than analysts had expected. Like-for-like sales across the entire group fell by 12 per cent in the year.
Schulman said 'things got a little bit choppy' in the US in the fourth quarter but insisted Burberry saw 'opportunity' in the country despite President Donald Trump's tariffs. 'The American luxury customer is very important to us,' he added.
The chief executive has been aiming to refocus the company on classic outerwear products, such as its staple trenchcoats and scarves. He has also broadened the range of price points, including lower ones in certain categories.
Luca Solca, a luxury analyst at Bernstein, said he had been 'expecting a couple of quarters of pain, and here is another one out of the way' but added that 'the new vision and strategy for the brand makes sense'.