Burberry threatens to sack 1,700 employees over $100m loss

British luxury fashion label Burberry says it could shed almost one-fifth of its global workforce over two years to reduce costs as it fell into an annual net loss.

Burberry announced this in a statement on Wednesday, May 14, 2025.

Burberry is undergoing a turnaround plan to help boost sales and cut costs as the global luxury sector struggles with weak consumer demand, notably from China.

The group’s net loss stood at £75 million ($100 million) in the 12 months to the end of March, compared to a profit of £270 million one year earlier.

Revenue slid 17 per cent to £2.46 billion.

Further cost-saving measures were announced on Wednesday, targeting additional savings of £60 million by 2027, which would impact around 18 per cent of its workforce, or 1,700 people.

“While we are operating against a difficult macroeconomic backdrop and are still in the early stages of our turnaround, I am more optimistic than ever that Burberry’s best days are ahead,” said Chief Executive Officer Joshua Schulman.

Schulman, who in July replaced Jonathan Akeroyd as CEO, has vowed to win back customers with a renewed focus on outerwear, including its famed trench coats.

Burberry’s staple outerwear and scarves outperformed its other products, the group said in the earnings statement, in a positive sign for the turnaround plan launched in November.

The group warned, however, that the economic environment has become “more uncertain in light of geopolitical developments”, as the fallout from United States tariffs threatens to dampen consumer confidence.

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The news of cost-cutting plans and a better-than-expected fourth quarter sent shares in Burberry soaring more than eight per cent in morning deals on London’s FTSE 250 index.

Burberry exited London’s top-tier FTSE 100 index in September after 15 years, with analysts citing strategic mistakes and weak demand from China.

The head of markets at Interactive Investor, Richard Hunter, said: “Without question, there is some momentum building.

“Burberry will want to consign the past year to the history books as soon as possible. But the new strategy will take time to filter through.”

Despite Wednesday’s surge, the group’s share price remains down around 25 per cent over the past 12 months, AFP reported.

The Asia-Pacific region saw Burberry’s largest decline in comparable store sales in the reported year, with turnover in mainland China falling 15 per cent.

China is the world’s biggest spender in the luxury sector, accounting for half of global sales.

But as the country’s post-pandemic recovery falters, consumption has flagged, sending jitters across the globe.

The Star