Burberry may cut 1,700 jobs globally to reduce costs as profits fall

The Guardian

14-05-2025

Burberry has said it could cut 1,700 jobs worldwide by 2027 – including removing the entire night shift at its Yorkshire raincoat factory – as the struggling fashion house ramps up its efforts to slash costs after a tumble in profit.
The British luxury brand announced the job cuts on Wednesday after reporting a 117% fall in its annual pre-tax profits in the last financial year. It recorded a £66m loss, down from a profit of £383m, as the company has struggled against a broader malaise in the global luxury goods industry.
The company has said a new plan to find £60m in cost savings could affect 1,700 jobs around its global offices. Burberry employed about 9,300 people across the world last year, so the cuts could affect almost a fifth of its staff.
Joshua Schulman, the chief executive of Burberry, said most of the cuts would be at the group's head offices around the world – led by London – but jobs would also go by reorganising staff rotas in stores and dropping one shift at its factory in Castleford.
He said the change in Castleford, which is expected to affect about 150 jobs, came ahead of a 'significant investment' in the second half of this year in the factory.
'For a long time we have had overcapacity at that facility and that's simply not sustainable at this point,' he said. 'We are making this change to safeguard our UK manufacturing and will be making a significant investment in renovating the factory [later this financial year].'
The fashion house, which is best known for its signature trench coats, has struggled in recent years because of a weak luxury market and a difficult brand revamp project. The company hired Schulman, the former boss of the US fashion brand Coach, as chief executive last year in an attempt to revive its fortunes.
The new plan to cut costs is on top of a £40m savings programme that Schulman announced in November. Burberry shares bounced by as much as 8.6% on Wednesday morning.
Schulman said he was 'more optimistic than ever that Burberry's best days are ahead', although he admitted the first half of the last financial year had been challenging. Overall revenue in its financial year ending on 29 March dropped by 15%, stripping out the impact of foreign exchange rates.
Charlie Huggins of the investment broker Wealth Club said the 2025 period had been an 'annus horribilis' for Burberry.
'Luxury consumers across the globe significantly tightened their belts hitting the whole luxury sector. But Burberry has seen more impact than most,' he said. 'Its operational execution has left a lot to be desired in recent years and the brand has lost its lustre, compounding the wider sector's issues.'
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Huggins noted, however, that there had been some 'tentative signs' of encouragement, with a 6% like-for-like drop in sales in the final quarter of the year, which was not as bad as the 7% drop that City analysts had forecast.
A wider downturn in the luxury goods sector has also hit the sales of bigger rivals such as Kering, which owns brands such as Gucci and Balenciaga, and LVMH, which owns Louis Vuitton and Christian Dior.
Burberry has lost roughly a quarter of its market value over the past year, while LVMH has lost about a third, and Kering is down by more than two-fifths.