Burberry plans to reduce its global workforce by approximately 1,700 positions by 2027, including the elimination of the night shift at its historical manufacturing site at Castleford, Yorkshire.
Job cuts at the luxury brand follow a £66mn loss, down from a profit of £383mn. Its latest results for the 52 weeks ending 29 March also show sales down 17% to £2.5bn. Burberry is amongst retailers facing a broader slowdown in the global luxury goods industry.
The heritage brand employs around 9,300 people globally, so the cuts could impact almost a fifth of its staff. Joshua Schulman, Burberry’s chief executive, stressed most of the cuts would be at the group’s head offices around the world, led by London. But jobs would also go by reorganising staff rotas in stores, and dropping one shift at its trench-coat factory in Castleford. He said no significant store closures were planned.
The change in Castleford will happen before a “significant investment” in the second half of this year in the factory, Schulman added.
“For a long time we have had overcapacity at that facility and that’s simply not sustainable at this point,” he said. “We are making this change to safeguard our UK manufacturing and will be making a significant investment in renovating the Victorian factory [later this financial year].”
Late last year, Burberry launched a £40mn cost-cutting programme after sinking into a loss. In January, despite festive sales dipping down 7% YOY, the brand stressed it was “encouraged” by early signs of progress.
“Our customers are responding to our timeless British luxury brand expression. With improvement in brand sentiment, we will be ramping up the frequency and reach of our campaigns as our autumn and winter collections arrive in store,” added Schulman.
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