Like many other retail businesses around the world, Ralph Lauren has decided to cut its global workforce.
The company announced the change-up on Tuesday, September 22, and revealed the new plan.
While it is easy to assume COVID-19 is to blame for the budget cuts, retail businesses have been trying to save money in any way possible over the past few years.
According to a spokesperson for Ralph Lauren, the company is reducing its workforce by 15%.
They had nearly 25,000 employees as of March, so if you do the math that is over 3,000 jobs that will be gone by the end of this year.
But, despite the layoffs, the company doesn’t have any new plans to shut down stores.
Ralph Lauren announced a previous plan to cut costs after their second quarter results were not as strong as some may have hoped.
Because of the global pandemic and stores being forced to close, Ralph Lauren suffered a $128 million loss.
It’s clear Ralph Lauren believes this move will help the company moving forward, but the director of retail studies at Columbia University’s Graduate School of Business, Mark Cohen, wonders if it may be too little too late.
“In the cold hard light of day, in the throes of the pandemic when demand is muted and on the heels of the department store business declining, this may not be too little too late, but it’s a long time in coming,” he told Retail Dive.
“And it’s not his [Ralph Lauren’s] fault. Unlike other companies that we see in bankruptcy, Ralph has been right-sizing and reining in superfluous activity, but now it’s imperative. Whether or not 15% is enough, well, nobody knows how long COVID is going to be here.”
Because we don’t know how long COVID-19 is going to be around, nor how long it’s going to affect retail businesses, companies need to simply focus on staying afloat.
In fact, high-end businesses such as Ralph Lauren could take even longer to bounce back since people aren’t as interested in spending lots of money on clothes.
It is also a great time for Ralph Lauren as a company to pivot and find new ways to reach a larger audience.
“Ralph created a lifestyle brand which is kind of the archetype of a lifestyle brand,” Cohen shared.
“He has always been both brilliantly creative and ridiculously indulgent. There has been an underlying issue of whether Ralph can transition to a more contemporary view of himself.”