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Burberry to slash 500 jobs as part of £55M cost-saving initiative

Burberry to slash 500 jobs as part of £55M cost-saving initiative
Burberry to slash 500 jobs as part of £55M cost-saving initiative

British luxury fashion house Burberry has reportedly announced that it is planning to slash 500 jobs at the global level comprising 150 in its UK head offices. The company has opted for this layoff in a bid to reduce costs by £55 million following a sales downturn amid COVID-19 pandemic.

Sources state that Burberry currently employs 3,500 people in the UK. The company intends to cut various head office roles across several departments, aiming to keep its headquarters in both, Leeds and Central London. The company has also decided to keep jobs in its stores and manufacturing department intact.

According to Julie Brown, the Chief Operating Officer at Burberry, the company has been continuously reviewing its 13 stores in Hong Kong after its sales in the region were hit by pro-democracy protests as well as COVID-19. She has further stated that Hong Kong currently accounts for less than 3 per cent of Burberry’s sales, much lower as compared to the previous 8 per cent.

The company has clarified that none of its stores outside the UK will face closures. Burberry, however, intends to focus on improving retail efficiency with minimum workforce in its stores and cutting on back office space.

Marco Gobbetti, the Chief Executive of Burberry, has stated that the company keenly focuses on product development and making other organizational changes that increase its agility and create structural savings for reinvestments in consumer-facing activities. He has further explained that Burberry’s sales were severally affected due to a drop in the luxury demand and it will take time for returning to pre-crisis levels with the reopening of overseas travel.

As recorded, there was a decline of 20 per cent in Burberry’s sales during the month of June and it is expected that the trading in three months to the end of September will depict a similar downslide of 15 per cent to 20 per cent.

 

Source Credits:

https://www.theguardian.com/fashion/2020/jul/15/burberry-to-cut-500-jobs-worldwide-in-55m-cost-cutting-drive-covid-19