Burberry may cut 1,700 jobs globally to reduce costs as profits fall | Burberry group

Burberry has said it could cut 1,700 jobs worldwide by 2027 – including removing the entire night shift at its Yorkshire raincoat factory – as the struggling fashion house ramps up its efforts to reduce costs after a tumble in profits.

The British luxury brand announced the job cuts on Wednesday after reporting a 117% fall in its annual pre-tax profits in the last financial year. It recorded a £66m loss, down from a profit of £383m, as the company has struggled against a broader malaise in the global luxury goods industry.

The company said a new plan to find £60m in cost savings could affect 1,700 jobs around its global offices. Burberry employed about 9,300 people across the world last year, so the cuts could affect almost a fifth of its staff.

Joshua Schulman, the chief executive of Burberry, said most of the cuts would be at the group’s head offices around the world – led by London – but jobs would also go by reorganising staff rotas in stores and dropping one shift at its trenchcoat factory in Castleford. He said no significant store closures were planned.

The change in Castleford, which is expected to affect about 150 highly skilled jobs, came ahead of a “significant investment” in the second half of this year in the factory, Schulman said.

“For a long time we have had overcapacity at that facility and that’s simply not sustainable at this point,” he said. “We are making this change to safeguard our UK manufacturing and will be making a significant investment in renovating the Victorian factory [later this financial year].”

He said Burberry had “an ambition” to increase the scale of UK production “over time” and saw value in the “tradition of making trench coats right here in the UK”.

The fashion house, which is best known for its signature trench coats, has struggled in recent years because of a weak luxury market and a series of short-lived attempts to revive the brand with different designers. The company hired Schulman, the former boss of the US fashion brand Coach, as chief executive last year in an attempt to turn around its fortunes.

One job that appears to be safe as part of Schulman’s revamp is that of the chief creative officer, Daniel Lee, whose role had been seen to be a risk under the new regime.

Schulman said he “couldn’t be happier with the progress our team is making” on moving Burberry from “modern British luxury to timeless British luxury” and that Lee’s latest collection was “an extraordinary expression of timeless British luxury and all of us are very excited about what is to come”.

The new plan to cut costs is on top of a £40m savings programme that Schulman announced in November. Burberry shares bounced by almost 20% at one point on Wednesday.

Schulman said he was “more optimistic than ever that Burberry’s best days are ahead”, although he admitted the first half of the last financial year had been challenging.

Underlying sales at the group fell 15% to £2.5bn for the year to 29 March but the figures indicated a marked improvement in the final quarter when sales fell only 6%.

The company partly blamed the drop on lower sales to Chinese tourists and the post-Brexit removal of VAT tax break for tourists shopping in the UK.

Schulman said sales in the US had been “choppy” in recent months, with a number of ups and downs since the Trump administration took office.

Charlie Huggins, of the investment broker Wealth Club, said the 2025 period had been an “annus horribilis” for Burberry.

“Luxury consumers across the globe significantly tightened their belts hitting the whole luxury sector. But Burberry has seen more impact than most,” he said. “Its operational execution has left a lot to be desired in recent years and the brand has lost its lustre, compounding the wider sector’s issues.”

A wider downturn in the luxury goods sector has also hit the sales of bigger rivals such as Kering, which owns brands such as Gucci and Balenciaga, and LVMH, which owns Louis Vuitton and Christian Dior.

Burberry has lost roughly a quarter of its market value over the past year, while LVMH has lost about a third, and Kering is down by more than two-fifths.