(Reuters) – Luxury apparel maker Ralph Lauren Corp will cut 15% of its global workforce by the end of its fiscal year in a company-wide restructuring to lower costs and move more of its business online, it said on Tuesday.
The company had a total workforce of 24,900 as of March end and based on that, the plan could impact more than 3,700 jobs.
The COVID-19 health crisis has hammered demand for high-end handbags, apparel and accessories in retail stores, forcing luxury goods companies to slash costs and slow brick-and-mortar expansion plans.
However, their e-commerce sales have surged. Ralph Lauren said it would invest in digital platforms to support e-commerce operations, expand product personalization and add new features like augmented reality.
It will also move some human resource and planning systems to online cloud platforms, and streamline reporting lines.
“The changes happening in the world around us have accelerated the shifts we saw pre-COVID, and we are fast-tracking some of our plans to match them,” Chief Executive Officer Patrice Louvet said.
The layoffs could result in gross annual pre-tax savings of about $180 million to $200 million, the company said. It expects to incur one-time pre-tax charges of about $120 million to $160 million in fiscal 2021.
Ralph Lauren shares were up 1.6% in early trading.
Source: Read Full Article