[LONDON] Burberry Group plans to cut almost a fifth of its workforce as its new chief executive officer tries to turn around the British trench-coat maker, after its push into high fashion flopped amid slumping global demand for luxury goods.
The London-based company plans an additional £60 million (S$103.9 million) of savings in the next two years, affecting as many as 1,700 roles – equivalent to 18 per cent of its global workforce. The savings are on top of the £40 million set out by chief executive officer Joshua Schulman in November.
Burberry’s shares rose as much as 10 per cent, the most in just over a month on an intraday basis. The company’s struggles ousted it from the UK’s benchmark FTSE 100 Index last year, and uncertainty surrounding US President Donald Trump’s trade tariffs has weighed on the stock so far in 2025.
Most job cuts will be office roles in the UK, Schulman told reporters on a call Wednesday (May 14), though global retail positions will be affected. He also said the Burberry’s apparel manufacturing site in Castleford, northern England, will scrap its night shift to tackle over-capacity. The move will affect about a quarter of jobs there, chief financial officer Kate Ferry said, declining to say how many workers the plant has.
Turnaround bid
Schulman, who joined in July, has vowed to turn around a brand struggling to recover its appeal with so-called aspirational consumers. A cost-of-living crisis has crimped demand, while Burberry faces a lack of appetite for creations by designer Daniel Lee, who’s been at the company for more than two years.
So far, Schulman has tried to lift the popularity of Burberry’s outerwear – including trench coats with their distinctive beige check that cost about £2,000 – and has indicated less focus on handbags that are not part of its heritage.
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Under Schulman, Burberry has put out ad campaigns with British celebrities such as Kate Winslet and Jerry Hall in a bid to appeal to a wider customer base. The company will also increase store staff at peak times, he said on the call.
Among the new planned cost savings, Burberry cited procurement and real estate, and said job cuts would be subject to consultation where applicable. The company expects one-off costs of about £80 million from the overall plan.
In 2020, the company cut 500 positions as demand for luxury goods waned during global pandemic lockdowns.
The latest cuts came as Burberry reported sales fell less than expected in the fourth quarter, while its adjusted operating profit for the year also came in higher than the analysts predicted at £26 million. Still, that is far short of the £418 million reported a year earlier.
Though the cost savings are welcome, “time is running out for Burberry,” Charlie Huggins, manager of the quality shares portfolio at investment adviser Wealth Club, said in a note. “Investors have seen several failed turnaround plans from Burberry in recent years. This one feels like a last chance saloon.” BLOOMBERG
