The Estée Lauder Cos. Inc. issued a further breakdown of the between $600 million and $700 million it plans to incur in restructuring and other charges as part of its Leading Beauty Forward initiative.
On Tuesday, Lauder revealed that $89.7 million of the charges are related to optimizing the supply chain, other support structures and exit of underperforming operations, in a filing with the U.S. Securities and Exchange Commission. The company anticipates spending about $48.7 million in employee-related restructuring costs, according to the filing with the SEC. The three-year plan includes job cuts of between 900 and 1,200 positions — about 2.5 percent of the workforce.
The Leading Beauty Forward program, presented earlier in May, is designed to free up resources to allow Lauder to invest in new training, development and organizational models. Overall, Lauder expects the Leading Beauty Forward program to yield $200 million to $300 million in annual net benefits.
“The end result of all this…is that we will develop more funds to invest in our growth … these extra funds will be invested in more advertising, will be invested in more freestanding stores and will be invested in better in-store activities across department store and specialty,” said Lauder chief executive officer Fabrizio Freda when the plan was first unveiled.