Coty to cut 700 jobs as it enters 'next phase of transformation'

Coty is planning to cut up to 700 jobs as part of a new initiative aimed at streamlining its operations.

The company said the cost-saving scheme is designed to create a simplified, scalable operating model, reduce complexity across functions and markets, and sharpen its focus on key innovations and strategic market priorities.

As part of the initiative, the owner of Kylie Cosmetics and Rimmel London will eliminate 700 positions globally - about 5% of its total workforce - according to BoF.

Sue Nabi, CEO of Coty, said: "We are committed to building a more resilient Coty that is well-positioned for sustainable growth. When we first announced our All-in to Win Program in FY20, at the peak of COVID disruptions, our goal was to boost our margin profile and brand reinvestment firepower through a significantly lower fixed cost structure, supply chain simplification, procurement savings and strategic revenue management initiatives.

"With the cyclical and structural changes in the beauty industry and the global economy in recent years, including the rapid acceleration of e-commerce, the consolidation of retail channels and customers, and the new ways of brand discovery, Coty must once again adapt and evolve."

The next phase of the beauty company's All-in to Win programme aims to significantly strengthen the effectiveness of its operating model and improve efficiency.

It is expected to generate annual fixed cost savings of $130 million before taxes, including $80 million in FY26 and $50 million in FY27. Both the fixed cost savings and ongoing productivity savings are expected to deliver close to $500 million of savings between FY25-FY27.

"This next phase of our transformation program will further strengthen our operating model and simplify our fixed cost structure. We fully anticipate these changes will strongly position Coty to outperform the beauty market in the coming years, cementing our global leadership position in fragrances while expanding into certain growing and profitable beauty categories, all while steadily expanding our gross margins and EBITDA margins," Nabi added.

Key pillars of the "next phase of transformation" include:

• Scaled markets and regions - Streamlining the organisational structure across key markets to unlock operational efficiencies, reduce duplication and better align with the consolidation in the local and regional retail landscape.
• Streamlined support functions - Consolidate and centralise support function activities, better aligning with the new regional structures.
• Boost innovation impact - Step-change innovation impact by identifying key launch priorities early in the process, and focus organisational efforts and resources into fewer and more impactful initiatives.
• Optimize general & administrative spending  Structurally reduce non-people fixed costs across all areas of spend.