Luxury goods market in crisis: British icon announces mass layoffs

The crisis in the luxury goods market is starting to take its toll – even the biggest players are no longer immune to the global slowdown. Burberry, one of the most prestigious fashion brands in the world, has announced job cuts to save its finances and survive the transformation.

The luxury goods market , previously seen as immune to global shocks, is now experiencing a deep crisis . Slowing sales, changing consumer sentiment, inflation and economic uncertainty have affected not only the revenues of industry giants but also – increasingly visible – the fate of employees . The latest and most telling example: Burberry , a British fashion house with a tradition of over 160 years, has announced that it will cut around 1,700 jobs by 2027 .

Burberry - a British brand with a 160-year tradition is going through a crisis / Shutterstock

Although Burberry is one of the most recognisable players in the world of premium fashion , it has not been spared the effects of the deepening market crisis . Burberry's revenue fell by 17% year-on-year, and the company went from a profit of £418m to an operating loss of £3m .

The job cuts announced by new CEO Joshua Schulman will mainly affect office and night shift roles at the Castleford plant, where the iconic trench coats are made. They are part of a wider cost-cutting strategy that aims to reduce operating costs by around £100 million a year . While the plan aims to rebuild financial efficiency, for many employees it will simply mean losing their jobs .

Shanghai, China: Burberry boutique / Shutterstock

Burberry is no exception. Financial problems have also hit other industry heavyweights. LVMH , owner of brands like Louis Vuitton and Dior , has seen its fashion division drop 5 percent in sales . Kering is struggling with even bigger losses.

The global slowdown, changing consumer priorities and the growing importance of sustainable fashion are forcing major fashion houses to rethink their strategies. Burberry's situation also shows that the costs of transformation are borne not only by shareholders, but also by ordinary employees.

Faced with falling revenues and a need to reshape their offerings, luxury brands are having to redefine their identity. Burberry is trying to get back to its roots, focusing on classic outerwear and a more understated aesthetic. Daniel Lee’s campaigns and shows have been met with critical acclaim, and the company’s shares have jumped 9% since announcing a restructuring plan – a sign that the “cure” is starting to work. But will the collection’s success be enough to restore stability to the company and save its employee community?