By Anuja Bharat Mistry

(Reuters) -Stee Lauder on Tuesday expanded a restructuring plan that would now mean up to 7,000 jobs when cosmetics giant struggles with persistent demand weakness, especially in Asia, and sent its shares down 19%.

The company now expects that profits for the third quarter will be far below expectations, with reference to challenges in its Asia Travel business, especially at airports and travel destinations in Korea and China.

“For the third quarter, we expect the total soft retail trends to continue in Asia Travel Retail, which significantly pushes our organic net sales,” said new CEO Stephan de la Forster, which took over at the beginning of the year, in a statement on Tuesday .

Estee Lauder has met with challenges in increasing sales growth in China, which accounted for about a quarter of the company’s sales in 2024, due to high unemployment, a struggling economy and an increasing preference for local brands.

“Simply said, we lost our agility. We did not use the higher growth opportunities,” De La Gaverie said on a call after income and added that Estee has settled because of its inability to adapt to trendy innovations in time.

In October, the parent company went to Clinique and Mac Lipstick their annual forecasts as part of a planned turnaround after meeting several quarters of declining sales.

On Tuesday, de la Forster said that the Turnaround strategy will involve new luxury price levels and increase investments in the consumer initiative and a simplified organizational structure.

“The company still has a long way to prove that it can renew and adapt enough to meet the needs of younger beauty consumers, but the announcement of a new strategic plan is a step in the right direction,” Sky Canaves said, analyst with emarkets.

The Manhattan-based company said that the new plan also aims to “manage external volatility, such as potential tariff increases globally.”

The comments come into the background of China that introduced targeted customs on US imports on Tuesday in response to the sweeping information for Chinese imports that US President Donald Trump introduced.

The company estimates a net reduction of 5,800 to 7,000 jobs at the end of budget in 2026. The recently announced dismissals are an extension of its plans stated in February last year when the company said it would decrease up to 5% of its global labor.

From June 30, 2024, the New York-based company had approximately 62,000 employees worldwide.

Estee Lauder expects to take restructuring and other fees of between $ 1.2 billion and $ 1.6 billion.

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