Ralph Lauren store in Beverly Hills, Calif., as seen on July 30, 2020.MARIO ANZUONI/Reuters
Luxury apparel maker Ralph Lauren Corp. will cut 15 per cent of its global work force by the end of its fiscal year in a company-wide restructuring to lower costs and move more of its business online, it said on Tuesday.
The company had a total work force of 24,900 as of the end of March, and based on that, the plan could affect more than 3,700 jobs.
The COVID-19 health crisis has hammered demand for high-end handbags, apparel and accessories in retail stores, forcing luxury goods companies to slash costs and slow brick-and-mortar expansion plans.
However, their e-commerce sales have surged. Ralph Lauren said it would invest in digital platforms to support e-commerce operations, expand product personalization and add new features like augmented reality.
It will also move some human resource and planning systems to online cloud platforms, and streamline reporting lines.
“The changes happening in the world around us have accelerated the shifts we saw pre-COVID, and we are fast-tracking some of our plans to match them,” chief executive officer Patrice Louvet said.
The layoffs could result in gross annual pre-tax savings of about US$180-million to US$200-million, the company said. It expects to incur one-time pre-tax charges of about US$120-million to US$160-million in fiscal 2021.
Ralph Lauren shares were up 1.6 per cent in early trading.
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