Companies

Hundreds of jobs to be axed at Burberry

Jul 8, 2024 United Kingdom

The UK-based luxury label plans to cut hundreds of jobs as part of a radical cost-cutting programme intended to bolster falling profits, the Telegraph reports

The Telegraph reveals that employees were first informed of the restructuring at a Zoom meeting in late June, where those affected were told they would face a redundancy or have to reapply for their jobs. It is also understood that union officials are coordinating redundancy settlements with a select group of employees.

Burberry has refused to say how many people will be affected, but workers fear that up to 400 jobs could be at risk, particularly in the company’s UK offices. The company currently employs 9,169 people worldwide.

Jonathan Akeroyd, who joined Burberry as Chief Executive Officer in 2022, has been trying to oversee a turnaround at the company. However, the company’s profits fell by 36% to 418 million British pounds in the last financial year, while sales fell by 4% to 2.87 billion British pounds. He has admitted that the company has underperformed but has also sought to blame the impact of the government's tourist tax.

But the fact is that the British label has lost more than a third of its stock market value since the turn of the year: its share price fell by 57% over the past 12 months to its lowest level in 15 years. It is one of the worst performers on the FTSE 100 and is in danger of being dropped from the blue-chip index.

According to Luca Solca, a luxury goods analyst at Bernstein, quoted by the Telegraph, “organic growth is not forthcoming. Burberry has been underperforming for years”.

Image Credits: fortune.com

United Kingdom Burberry Companies Employment Luxury