A drop in luxury fashion results in thousands of Ralph Lauren layoffs

Ralph Lauren Corp. plans to cut 15% of its global workforce by the end of the fiscal year, shifting more operations online and containing expenses amid COVID-19 effects.

In an effort to contain expenses and weather the effects of COVID-19 on sales and consumer behavior, premium retailer Ralph Lauren Corp. said on Tuesday that it would lay off 15% of its global workforce by the end of the current fiscal year. The 530-store worldwide fashion house, based in New York, announced that it will be shifting more of its operations online as a result of the changes. The company, with a headcount of over 24,900, may lose over 3,700 jobs due to adjustments. The health crisis has led to decreased demand for upscale clothing, accessories, and purses, causing businesses to postpone expansion plans and affecting over 3,700 workers.

Additionally, it has slowed down the largest merger in the history of the industry, as France's LVMH is attempting to back out of its $16 billion acquisition of Tiffany & Co. Luxury department stores Harrods and Burberry Group have eliminated hundreds of jobs, but Ralph Lauren plans to invest in digital infrastructure to support e-commerce operations and enhance product personalization due to the surge in online luxury sales. The corporation anticipates yearly pre-tax savings of $180 million to $200 million due to layoffs and one-time pre-tax charges of $120 million to $160 million in fiscal 2021.