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British fashion giant Burberry announced plans to slash almost one fifth of its global workforce, laying off 1,700 employees. The move comes as a major cost saving move to revive the company’s performance.The cuts come as part of a broader shake-up under chief executive officer Joshua Schulman, who joined the company last year to reverse its years of underperformance and put Burberry back on course.The majority of the job losses will affect office-based roles, and a night shift at the company’s Castleford trench coat factory in England will be scrapped due to overproduction.“Our brand metrics have all shown a significant improvement in the second half versus the first half,” Schulman told journalists on a call, quoted by Reuters.
Looking for revival
The former Jimmy Choo boss has transitioned Burberry’s focus back to its heritage staples, particularly trench coats and scarves, after previous missteps including aggressive pricing and unclear brand positioning.He has also pinned his hopes on leather accessories which have a higher margin and on designer Daniel Lee.Between 2017 and 2021, the group was run by Marco Gobbetti and designer Riccardo Tisci, the company had tried to establish the group as a high end luxury fashion brand, however, it did not yield much financial success.Schulman replaced Jonathan Akeroyd and is the fourth CEO of the brand in a decade.
Performance
The shake-up news and better than expected financial results sent the brand’s shares sparing 8% in early trading following the update and better-than-expected financial results. For the financial year ending 29 March 2025, Burberry reported an adjusted operating profit of £26 million, well above analyst expectations of £11 million, helping the brand narrowly avoid a loss.However, the broader luxury market downturn remains a concern. Comparable sales fell 6% in the fourth quarter, though this was slightly better than the 7% drop analysts had forecast.Region wise categorisation showed that sales in the Americas and the Europe, Middle East, India and Africa region, each declined 4% against last year. Similarly, sales in the Asia Pacific area also plunged 9%.Schulman admitted that US consumer behaviour in particular had shown signs of softening. “As we got into Q4, the US customer was keeping their momentum but … things got a little choppy as we headed into February, particularly in the US market,” he said.The US currently accounts for 19% of Burberry’s clients. While the company did not comment on the potential impact of US tariffs, it did flag “geopolitical developments” as a factor contributing to economic uncertainty. No concrete financial targets were set for the 2026 fiscal year.
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