Cosmetics giant Estee Lauder is cutting 2,000 jobs -

[KristyVictoria]

Quote:

Originally Posted by Janice This theory pretty much spot on, many companies are "right sizing" to avoid potential losses in future earnings. I'd say Estee is pretty much the Toyota of cosmetics if they are feeling a pinch it's an indicator of the industry aka the "Lipstick Index" is looking pretty grim. While a cutback in staffing is extremely tragic for the employees being released, it IS a reasonable long term strategy to sustain profitability.

While I agree, I think they should still be trying to cut profit margins before cutting jobs. Obviously if they aren't even taking losses yet, this would be the best thing to do.

I find the greed abhorrent.

 

[ClaireAvril]

Quote:

Originally Posted by KristyVictoria While I agree, I think they should still be trying to cut profit margins before cutting jobs. Obviously if they aren't even taking losses yet, this would be the best thing to do. I find the greed abhorrent.

That's the thing. Companies are not thinking about the welfare of the employees. They are in the business to make money for their shareholders. They wantto make more and more and more profit to expand.. that is how you grow as a company. It's not a charity.. and it sucks for the people who are there doing their 9 to 5 or more in order to make ends meet - they are SOL.

In our eyes they should cut profits.. but in the business world its just not possible.

 

[NadiaD]

Oh god, if its finaly hitting the cosmetics sector things must be looking bad. I actualy had a letter from EL recently when I applied for a job saying they were 'restructuring' and the position i was going for is no longer available. Guess that was a pretty good indicator, huh?

I wonder how long before it hits the rest of us? Im at BeneFit, and our sales are in the pooper big style.

Fingers crossed for everyone here that we will ride this out.

Nxx

 

[YSLGuy]

Thats awful. I can't wait for times to get better.

 

[MissMarley]

Already happened at our counters- we lost a part-timer, the EL counter lost a full-time. They cut all of our hours. It's really scary- and it's really demoralizing. I feel like I'm walking on eggshells at work all the time.

 

[BEA2LS]

this breaks my heart! i hope this gets better and I hope our new president can help us make this better.. we made it through the great depression and will be able to make it through this.
good luck to everyone who has lost jobs or been affected in this economy right now, my prayers go out to you. I hope nobody here will get affected, i know how talented everyone here is :'(

 

[COBI]

Quote:

Originally Posted by ClaireAvril I thought that since the economy was going down the sales of cosmetics were either remaining the same or increasing? I just checked out Estee's June 2008 Financial statement - their GP/NE has been on a steady incline since 2004 see page 57 http://library.corporate-ir.net/libr...C5_EL_AR08.pdf It's like some companies are using these times as an excuse to cut jobs to keep their profit margins high or higher. I know profit is what business is all about but its just so sad when you think about it.

In fairness to the company, you need to look at the most recent filings. June 30 was too long ago to be considered indicative of their current state.

The most recent 10-Q (which are the quarterly filings for companies; I write these reports for my company) for EL was filed on 2/5/09 with the SEC for the quarter ended December 31, 2008. Earnings and earnings per share are both down over 20% for the six months ended December 31, 2008 compared to the six months ended December 31, 2007. These six months are considered the first six months of EL's fiscal year.

The same report will show you that for the 3 months ended December 31, 2008 net income was down approximately 30% compared to the same period in 2007. This means 30% during the Holiday season!

I think the current financials clearly show that this is not just about right-sizing but that they are truly needing to respond to significantly declining sales.

I honestly hope for the best for anyone affected, and, of course, profit is a factor, but I don't think any company takes these decisions lightly.

 

[L281173]

It is just so sad to see how this economy has deteriorated with issues such as outsourcing and corporate corruption. I have several friend who are employed in the retail arena (cosmetics, clothing, etc.) and they are suffering terribly.

 

[L281173]

Quote:

Originally Posted by xStarryEyedX this is so sad... i'm starting to look for jobs in doctors offices instead of makeup counters for this exact reason... as much as we hear about the lipstick effct, that's totally not the case in my area. people here have money, but they are smart with it so they don't spend it (if they come in for one foundation you're not going to add on a brush/blush/primer etc. it's just not going to happen.)... i'm starting to freak out at my job because we're just not pulling in numbers...they just got rid of my store manager and brought in a new one, like that's going to make things better... people still aren't going to spend their money. i know these companies are businesses and they have to watch their asses...but i wish they were slightly more concerned for us.

Don't think that you will be immune to the terrible economy by working in a doctor's office. Physicians are taking huge losses due to the loss of patients who have lost their medical coverage. Malpractice costs are eating physicians alive. Not matter where you go, you can't avoid this economic downturn.

 

[KristyVictoria]

Quote:

Originally Posted by ClaireAvril That's the thing. Companies are not thinking about the welfare of the employees. They are in the business to make money for their shareholders. They wantto make more and more and more profit to expand.. that is how you grow as a company. It's not a charity.. and it sucks for the people who are there doing their 9 to 5 or more in order to make ends meet - they are SOL. In our eyes they should cut profits.. but in the business world its just not possible.

It's absolutely possible and other companies are doing it. I'm not saying that they should operate at a loss, but there is nothing wrong with *less* profits and growth rate to help keep jobs. I guarantee you their CEOs are still making enough to pay 10 or 15 SA's salaries and they won't be taking any pay cuts.

 

[Ernie]

In NYC they are looking to cut 15,000 teachers, now that really sucks.

I hope no one is affected here with the EL cuts.

 

[ohnna-lee]

Quote:

Originally Posted by KristyVictoria It's absolutely possible and other companies are doing it. I'm not saying that they should operate at a loss, but there is nothing wrong with *less* profits and growth rate to help keep jobs. I guarantee you their CEOs are still making enough to pay 10 or 15 SA's salaries and they won't be taking any pay cuts.

It's touchy, this is their livelihood. Even if they can keep the people employed because the statement showed them not taking huge loses yet, they have other investments that could have tanked. Billionaires are losing their asses, their entire fortunes because of the stock market. CEOs have their assets tied up in more then just their own company.

It comes down to simple supply and demand also, it makes no sense to keep people employed when no one has the money to buy. The sales that MAC has never had in the past is a good indication of how bad the economy is.

A number of big companies are filling for bankruptcy protection. Many have gone under. I know that my Ralph's no longer carries the chocolate I like, I am afraid to do any digging and find that they went under.

We can sit back and think that the people with huge companies are safe, but the sad fact is, very few will be untouched by this. Only a handful will come out unscathed.

Believe me that these people are losing sleep at night. It isn't just us that is hurting.

 

[xStarryEyedX]

Quote:

Originally Posted by L281173 Don't think that you will be immune to the terrible economy by working in a doctor's office. Physicians are taking huge losses due to the loss of patients who have lost their medical coverage. Malpractice costs are eating physicians alive. Not matter where you go, you can't avoid this economic downturn.

you're right, i didn't even think of that... i have an interview at a PT office soon, the good thing (well not good thing, but you know) about physical therapy is people kind of always need it after surgery/car accidents/ etc. but you're right... ugh

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