L’Oréal, the world’s largest cosmetics company, is preparing for significant layoffs in its China operations, particularly targeting its travel retail division. Reports indicate that up to 50% of the travel retail workforce could be affected, a move prompted by a prolonged slump in duty-free sales and broader market challenges. While the company has not officially confirmed the scale of the layoffs, sources suggest that affected employees may receive compensation packages based on their years of service, with a minimum of five months’ salary. This restructuring comes after L’Oréal reported its first-ever sales decline in China in the fourth quarter of 2024, with North Asia sales falling by 3.2% year-over-year, highlighting the mounting pressure from weakening consumer confidence and the rise of competitive domestic beauty brands.
Despite these setbacks, L’Oréal remains committed to the Chinese market and is actively pursuing a future-oriented strategy. The company continues to invest in innovation and digital transformation, exemplified by the launch of the 2025 L’Oréal BIG BANG Beauty Tech Innovation Program, which encourages startups and SMEs to develop cutting-edge beauty technologies. L’Oréal is also bolstering its consumer-centric approach by expanding its brand portfolio, investing in emerging Chinese beauty brands, and enhancing its omni-channel presence to reach a broader spectrum of consumers, including Gen Z, boomers, and men. The opening of the Suzhou Intelligent Operations Center and partnerships with local e-commerce giants further underscore L’Oréal’s focus on operational resilience and supply chain optimization.
Looking ahead, L’Oréal aims for a return to growth, targeting approximately 5% sales growth in China for 2025 and expressing strong confidence in the market’s long-term potential. The company’s future vision is anchored in sustainability, digital innovation, and regional collaboration, as seen in the expanded BIG BANG program and increased investments in research and development. While the current restructuring reflects the need to adapt to evolving market realities, L’Oréal’s ongoing commitment to innovation and its strategic investments signal a determination to maintain leadership in China’s dynamic beauty sector and to shape the future of beauty both locally and globally.
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(Source: Nikkei Asia | PR Newswire | Asia.com)
