Ralph Lauren announced Tuesday it is planning on cutting its global workforce by the end of the 2021 fiscal year as the company takes steps to cut costs and reorganize its business "for future growth."
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The impending cuts will affect roughly 15% of its global workforce, which Ralph Lauren said is expected to result in gross annualized pre-tax expense savings of approximately $180 million to $200 million.
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The company also expects to incur pre-tax charges of about $120 million to $160 million, the company announced Tuesday.
The reduction in its workforce is part of the company's "Next Great Chapter plan" in which it hopes to "deliver sustainable long-term growth and value creation" amid a tumultuous time for businesses.
This includes simplifying its "organizational structure and rolling out enhanced technology platforms" to support its global operations, the company said.
"The changes happening in the world around us have accelerated the shifts we saw pre-COVID, and we are fast-tracking some of our plans to match them – including advancing our digital transformation and simplifying our team structures,” Ralph Lauren CEO Patrice Louvet said.
The company plans to further invest in its e-commerce business. In doing so, the company will focus on new digital capabilities that support areas like omnichannel shopping, personalization, social commerce and augmented reality, officials said.
The company, like most retailers, took a hit this year when COVID-19 forced stores to close their doors for an extended period of time. However, its online sales have surged with the company seeing a 13% growth in online sales during its fiscal first quarter.
The company noted in its fiscal first-quarter earnings report that consumers "increasingly embrace omni-channel retailing" despite stores reopening across North America, Europe, and Asia under limited hours.