BUSINESS

Exclusive: L’Oréal Plans Major Layoffs in China Amid Sales Slump

Published: Apr. 16, 2025 5:03 a.m. GMT+8

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A customer looks at L’Oréal products in a shopping mall in Lyon, France. Photo: Bloomberg

L’Oréal is planning to lay off up to half its travel retail workforce in China, as the French cosmetics giant grapples with prolonged weakness in duty-free sales, multiple sources told Caixin.

Although the layoffs have not been officially announced, they are expected to affect up to half the team. Some departing employees are reportedly set to receive “n+5” compensation packages — a payout equal to their years of service plus five months’ salary, according to a source close to L’Oréal’s headquarter.

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L’Oréal plans to cut up to 50% of its travel retail workforce in China due to declining duty-free sales, mainly in Hainan and South Korea.
Travel retail’s contribution to L’Oréal’s revenue has sharply decreased, with Hainan now accounting for less than 1% of total sales amidst a 29.3% drop in duty-free sales in 2024.
Despite challenges, L’Oréal is committed to investing in China through innovation, beauty ecosystem development, and two new funds targeting beauty brand growth and sustainability.

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Who’s Who

L’Oréal: L’Oréal plans to cut up to half its travel retail workforce in China due to declining duty-free sales, particularly in Hainan and South Korea. Travel retail’s contribution to global revenue has sharply decreased. Despite this, L’Oréal is committed to investing in China, focusing on innovation, supply chains, and beauty ecosystem growth. The company launched two investment funds for beauty brands and supply chains, adapting to consumer preferences prioritizing quality, value, and sustainability.

Armani: Armani is mentioned in the article as one of the luxury brands that L’Oréal partners with for beauty and fragrance lines, alongside brands such as Valentino and Prada.

Valentino: According to the article, L’Oréal partners with luxury brands, including Valentino, for beauty and fragrance lines.

Prada: The article notes that L’Oréal partners with luxury brands, including Prada, for beauty and fragrance lines, highlighting its collaborations in the luxury beauty segment.

Cathay Capital: The article mentions that L’Oréal partnered with Cathay Capital to launch an investment fund targeting growth-stage beauty brands. This fund is part of L’Oréal's strategy to strengthen the beauty ecosystem in China by focusing on innovation and market growth opportunities.

Tiantu Capital: Tiantu Capital is partnering with L’Oréal to create an investment fund targeting early and mid-stage companies in the beauty supply chain. The fund focuses on tech innovation and sustainability, aligning with evolving market trends in China.

AI generated, for reference only