Estée Lauder has announced an expansion of its restructuring plan, which now includes up to 7,000 job cuts. The global beauty giant revealed the decision on Tuesday while also reporting a smaller-than-expected decline in second-quarter sales. Despite ongoing challenges, the company aims to regain momentum and improve its financial performance.

The restructuring initiative is part of Estée Lauder’s broader strategy to drive profit recovery and navigate external uncertainties, such as potential global tariff increases. After a rough 2023, which saw the company’s shares decline by approximately 49%, the brand is taking decisive action to stabilize operations.

The company’s recent executive shake-up has been a key element of its turnaround efforts. Following Stéphane de La Faverie’s appointment as CEO in January, Estée Lauder has been implementing significant leadership and operational changes.

Estée Lauder emphasized that the restructuring plan is designed to help the company “return to sales growth and restore a solid double-digit adjusted operating margin over the next few years.” The firm expects to incur restructuring and other charges ranging between $1.2 billion and $1.6 billion before taxes, covering employee-related costs, contract terminations, and asset write-offs.

Despite ongoing economic challenges, Estée Lauder’s latest sales report exceeded market expectations. The company reported a 6% decline in revenue, totaling $4 billion for the quarter. Analysts had predicted a steeper drop of 7.3%, expecting sales to hit $3.97 billion, according to data from LSEG.

While shares of Estée Lauder saw only a marginal decline in premarket trading following the announcement, the restructuring efforts are expected to shape the company’s long-term financial trajectory.

Estée Lauder’s aggressive restructuring measures signal a strategic effort to combat recent financial setbacks and adapt to market shifts. With a focus on regaining sales momentum and optimizing profitability, the company’s moves will be closely watched in the beauty industry. If successful, this transformation could position Estée Lauder for stronger performance in the years to come.