In the News Teaching Activity – why is beauty company Estée Lauder cutting jobs? (Feb 2025)

Rising costs and uncertainty about tariffs are threatening profits for Estée Lauder, owner of brands such as Clinique, MAC and Jo Malone.

The cosmetics giant is battling rising costs driven by inflation and geopolitical tensions, with tariffs threatening to inflate expenses across its global supply chain. Estée Lauder sources ingredients from countries such as Australia and Indonesia and operates facilities worldwide, making it vulnerable to shifting trade policies. The firm, which reported a $650m pre-tax loss, is restructuring to save $1bn as consumer spending weakens, particularly in China, Korea, and travel retail markets.

Estée Lauder to cut up to 7,000 jobs as sales fall - BBC News

1. Why do beauty companies like Estée Lauder rely on global supply chains?

2. What are the key factors driving Estée Lauder’s rising costs and job losses?

3. How do rising variable costs impact Estée Lauder’s profitability?