Ralph Lauren (NYSE: RL), the Luxury American fashion company, announced Tuesday it will be cutting 15% of its global employees before the end of the fiscal year. The news emerges with a restructuring plan set to lower costs and focus more on its online platform. With a workforce of about 24,900, the plan could affect over 3,700 workers. Shares rose following the revelation that the retailer would potentially be saving USD180 Million to $200 Million pretax.
The global COVID-19 pandemic has caused a plunge in demand for handbags, apparel and accessories. Ultimately, luxury companies have been forced to cut costs and pause any plans for brick-and-mortar locations.
Nevertheless, Ralph Lauren’s e-commerce sales have skyrocketed. Therefore, the retailer has decided to actively invest in its digital platforms with product personalization and possibly features such as augmented reality. Additionally, human resources and planning systems will be relocated to cloud platforms, and streamline reporting lines.
“The changes happening in the world around us have accelerated the shifts we saw pre-COVID, and we are fast-tracking some of our plans to match them,” Chief Executive Officer Patrice Louvet said.
“These steps will enable us to progress our brand elevation journey and deliver Ralph’s vision in today’s dynamic environment.”
The company is set to simplify its organization, in part meaning consolidated global marketing and branding functions. Furthermore, new digital initiatives are manufactured to facilitate a “faster and more connected decision-making from product design to market.”