Burberry is set to cut as many as 1,700 jobs worldwide as part of a wider cost-cutting effort, as the British fashion house grapples with a challenging luxury retail environment.
The company said Wednesday it aims to save an additional £60 million ($80 million) over the next two years, with the layoffs representing roughly 18% of its global workforce.
Burberry currently employs more than 9,000 people.
The announcement came alongside the release of its full-year results, which showed adjusted operating profit of £26 million—well above analysts’ expectations of £4.7 million.
Still, the figure marked a steep decline from the £418 million reported the previous year, underscoring the scale of the challenge CEO Joshua Schulman faces as he attempts to steer the brand back to growth.
Early signs of improvement amid tough market
Burberry reported a 6% decline in comparable sales for the fourth quarter ending March 29, a slight improvement over analyst forecasts for a 7% fall.
The company said that brand sentiment was improving, especially in outerwear and scarves, even as overall customer demand remained weak.
Schulman, who took the helm in July last year, said the brand is still in the early stages of its revamp but expressed confidence that ongoing initiatives will begin to bear fruit as the year progresses.
“We expect to see the impact of our actions build as the year progresses,” Burberry noted in its earnings statement.
Navigating a shifting luxury landscape
Burberry’s efforts come at a time when aspirational consumers are pulling back on discretionary spending due to inflation and global uncertainty.
The company has also been hit by reduced demand for entry-level luxury items and growing concern over potential trade tariffs under a second Donald Trump presidency.
The brand’s iconic trench coats, which retail for around £2,000, remain central to its strategy, as Schulman works to reassert Burberry’s high-end positioning.
However, the company faces an uphill battle after decades of brand dilution and inconsistent leadership—having cycled through four CEOs in the past decade.
In recent years, Burberry’s image has shifted, with its once-exclusive patterns becoming associated with mass appeal, particularly in the UK.
Its relegation from the FTSE 100 index last September symbolised the struggles of a once-dominant player in the luxury space.
Accelerated savings programme under way
As part of Schulman’s turnaround strategy, Burberry initiated a £40 million cost-cutting programme in November 2024.
The company now expects £24 million of those savings to materialise in the current fiscal year, with a further £60 million targeted by FY27.
Despite recent turbulence, Schulman remains optimistic. “The actions we’ve taken in the last 90 days reflect our commitment to reshaping Burberry for long-term success,” he said.
Shares in Burberry have fallen 16% so far this year, reflecting investor concerns about sustained weak demand and execution risk around the turnaround plan.
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