Bad news for employees of this luxury fashion brand, company to lay off 1700 employees due to…, not Michael Kors, Jimmy Choo, Louis Vuitton, it is...

Burberry, the British luxury fashion brand, is undergoing significant changes under the leadership of CEO Joshua Schulman. To enhance performance and cut costs, the company plans to lay off approximately 1,700 employees, representing around 20% of its workforce. These layoffs will primarily affect office-based roles. A night shift at Burberry's Castleford trench coat factory in England will be eliminated due to overproduction, as cited in a Reuters report.

According to CEO Joshua Schulman, despite the layoffs, Burberry's brand metrics have shown significant improvement in the second half of the year. Schulman plans to increase the frequency and reach of marketing campaigns as new collections arrive in stores. He believes that the brand's improvement in sentiment will drive future growth. He stated, "Our brand metrics have all shown a significant improvement in the second half versus the first half." He added, "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."

Schulman noted that US consumer behaviour showed signs of softening, particularly in February. The US market, accounting for 19% of Burberry's clients, experienced a slowdown. Schulman also cited "geopolitical developments" as a factor contributing to economic uncertainty, impacting the company's performance.

Burberry, a 170-year-old luxury fashion brand, has experienced significant leadership churn, appointing four different CEOs in just over a decade. This rapid succession reflects the company's efforts to adapt to the fashion industry's rapidly changing landscape and evolving demands. Between 2017 and 2021, Marco Gobbetti and designer Riccardo Tisci led the company, aiming to establish Burberry as a high-end luxury fashion brand. Despite their efforts, the company struggled to achieve significant financial success during this period.

Schulman, the 52-year-old former Coach and Jimmy Choo boss was named chief executive of Burberry, replacing Jonathan Akeroyd as the British luxury brand last year. He had issued its latest profit warning and had confirmed plans to slash a few hundred jobs. 

As reported, Burberry's adjusted operating profit for the financial year ending March 29, 2025, was £26 million. However, the company's comparable sales dipped by 6% in the fourth quarter. Although this decline was a setback, it was slightly better than the 7% drop forecast by analysts, as cited in a TOI report.