Burberry to lay off 1,700 workers after profit slump
What's the story
British luxury fashion brand Burberry has announced plans to cut its global workforce by around 1,700 employees by 2027. The decision comes after the company's annual pre-tax profits plummeted.
The firm's Yorkshire raincoat factory will cut its entire night shift as part of the cost-cutting measures.
The company reported a £66 million loss last fiscal year, down from a profit of £383 million, amid global luxury goods industry challenges.
Job reduction
CEO outlines job cut strategy
Burberry's CEO Joshua Schulman revealed most of the job cuts would be at the company's global head offices, with London being the worst hit.
Further, staff rotas in stores will be reorganized, and one shift at its trench-coat factory in Castleford will be dropped.
Schulman clarified that no significant store closures are planned as part of this restructuring process.
Justification
Schulman defends job cuts at Castleford
Defending the decision to cut jobs at the Castleford factory, Schulman said, "For a long time we have had overcapacity at that facility and that's simply not sustainable."
He stressed these changes are being made to safeguard UK manufacturing.
The company plans a "significant investment" in renovating this Victorian factory later this financial year.
Despite these cuts, Schulman expressed his ambition for Burberry to increase UK production scale over time.
Market challenges
Burberry's struggles amid luxury market downturn
Burberry has struggled in recent years with a sluggish luxury market and a few failed attempts to revive the brand with different designers.
Schulman, who previously headed US fashion brand Coach, was appointed CEO last year in an effort to turn the company's fortunes around.
Despite the challenges, Schulman remained optimistic about Burberry's future, saying he is "more optimistic than ever that Burberry's best days are ahead."