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Burberry potentially to axe hundreds of staff to cut costs

Chloe Burney
08 July 2024

Burberry is set to axe jobs as part of a cost-cutting scheme as it struggles to deliver a turnaround and boost falling profits.

British luxury brand Burberry has lost more than a third of its stock market value since the beginning of 2024. Its share price fell by 57% over the past year, falling to its lowest value in 15 years. Burberry is now worth £3.19 billion.

The company’s employees were first informed of a restructuring on a Zoom call last month, according to The Telegraph. At the time, workers were told they were either facing redundancy or having to reapply for their roles. The company has begun a 45-day consultation, signalling that hundreds of roles could be axed.

Reportedly, union officials are coordinating redundancy settlements. However, it is unclear how many jobs are set to be axed.

Burberry, renowned for its trench coats and famous check iconography, employs 9,169 people globally. The jobs cuts are expected to affect the company’s UK offices mostly, which are in London and Leeds.

The latest round of redundancies comes after a proposal to cut 500 jobs in 2020 when the business sought to save £55 million amid pressures from the pandemic.

Since then, Burberry has blamed a global slowdown in demand for luxury goods for a sharp dip in profits, as wealthy shoppers tightened their belts after rises in the cost of living.

Pre-tax profit plummeted 40% at the fashion brand last year to £383 million for the year ending 30 March 2024, while underlying earnings were 34% down year-on-year.

Burberry has propped up its sales figures with an increasing reliance on its wholesale business in recent years, which helped revenue remain relatively stable, at only a 4% annual drop to £2.97 billion. But analysts have said its over-reliance on wholesale, despite driving revenue, has impacted the brand’s image.

Burberry’s inability to halt its share price decline has already raised fears that it could soon become a takeover target, particularly at its current share prices.


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