Burberry, the brand best known for its iconic checkered pattern and fashionable trench coat, announced Wednesday that it may cut around 1,700 jobs worldwide in a major cost-reducing effort. The news comes as British luxury brand reported a staggering 117% drop in annual profits, or around $87.8M (£66m), over the last financial year.

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Burberry employed about 9,300 people across the world last year, meaning the cuts could take out about 20% of the brand’s workforce.

In a statement on the company’s website, CEO Joshua Schulman said Burberry is not looking to make any major store closures, and explained that the cuts will primarily come from the group’s head offices and the reorganization of in-store duties. It will also drop the entire nighttime shift at its trench coat factory in Castleford.

“For a long time we have had overcapacity at that facility, and that is simply not sustainable,” Schulman said of the Castleford cuts, per the announcement. “But I want to be very clear that we are making this change to safeguard our UK manufacturing, and in fact we will be making a significant investment to renovate this factory in the second half.”

While the layoffs are a major move for Burberry, it’s not the first of its recent cost-saving initiatives. In November of 2024, it announced a $53.2M (£40m) cost-savings program. Last July, the struggling company replaced CEO Jonathan Akeroyd after just two years in the role, in hopes of resuscitation.

Amid price hikes, inflation, and an uncertain economy, customers have tightened their purse strings, and demand for luxury goods has been falling. Burberry is not the only luxury brand making tough choices. Tapestry, the parent company of Stuart Weitzman, Coach, and Kate Spade nearly acquired Capri, the owner of Michael Kors, Versace, and Jimmy Choo last year, in an effort to revive the struggling brands. In its 2025 third quarter fiscal results, revenue decreased by 11.6% on a reported basis and 11.4% in constant currency.

At the time, John D. Idol, the company’s chairman and chief executive officer, said, “Overall our business remained challenged during the quarter and we were disappointed with our results. We are reevaluating our strategic initiatives to improve current sales trends. Looking ahead, we expect our performance to improve throughout fiscal year 2026 positioning us to return to growth in fiscal 2027 and beyond.”

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In January, founder and editor-in-chief of The Business of Fashion, Imran Amed, also spoke to the immense struggles luxury fashion brands are facing in modern times. “This is probably the most severe crisis that I’ve seen on the luxury side of the fashion industry since the Great Recession of 2008–2009, after the collapse of the global financial system when everything almost fell apart everywhere,” Amed said.

In Wednesday’s announcement, Schulman said Burberry may continue to see room for improvement even as they cut workforce numbers. “We are still in the early stages of our turnaround,” he said. “The current macroeconomic environment has become more uncertain in light of geopolitical developments.”

This post originally appeared at fastcompany.com
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