Coty Inc., the beauty company behind the likes of Covergirl, Kylie Cosmetics and Lancaster, among many others, is cutting up to 700 jobs as it revisits a strategy launched during the pandemic.
“We are committed to building a stronger, more resilient Coty that is well-positioned for sustainable growth. When we first announced our All-in to Win program in FY20, at the peak of COVID disruptions, our goal was to boost our margin profile and brand reinvestment firepower through a significantly lower fixed cost structure, supply chain simplification, procurement savings and strategic revenue management initiatives,” said Sue Nabi, chief executive officer of Coty.
“With the cyclical and structural changes in the beauty industry and the global economy in recent years, including the rapid acceleration of e-commerce, the consolidation of retail channels and customers, and the new ways of consumer brand discovery, Coty must once again adapt and evolve.”
This will include streamlining the organizational structure across key markets to unlock operational efficiencies, making support functions more efficient, boosting innovation impact and reducing non-people fixed costs across all areas of spend.
The program is expected to generate annual fixed cost savings of about $130 million before taxes, while the onetime cash costs associated with the program are expected to be about $80 million.
Coty estimates this initiative to impact about 700 positions.
Its net revenue declined 3 percent to $1.66 billion in the fiscal second quarter ended Dec. 31 as the fragrance effect that boosted Coty for the past year was not enough to offset a trio of weak demand in Asia, FX headwinds and a slowing mass market from weighing on sales.
In March, Skims, Kim Kardashian’s shapewear and apparel company, acquired Skkn by Kim from Kim Kardashian and Coty Inc. Coty acquired 20 percent of KKW Beauty, for $200 million in 2021. Now that stake will belong to Skims, while Kardashian’s 80 percent stake will also be transferred to Skims.
Coty isn’t the only beauty company cutting jobs. The Estée Lauder Cos. is reducing its workforce by as much as 7,000 positions.
