As an industry that generated $570 billion in worldwide revenue in 2024 and is growing by leaps and bounds, one thing’s for sure: there’s no shortage of customer interest in beauty and personal care.
Not only is the industry doing well, but it’s on track to get even bigger. The beauty industry is forecasted to grow by 8.4% per year through 2028, according to Euromonitor International.
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While there’s clearly money to be made, there’s also another problem brands in the space are facing: saturation. With hundreds of brands on the shelves in stores like Sephora and Ulta, it can be hard to capture customer attention when there’s simply too many options to choose from.
Now one of the world’s oldest cosmetics brands says it’s been forced to change a strategy it’s been trying to execute since the Covid pandemic. Unfortunately, that means a lot of layoffs are on the way.
Big changes are ahead for the owner of Kylie Cosmetics.
Image source: Bing Guan/Bloomberg via Getty Images
Big changes announced at Coty
Coty (COTY) , a legacy cosmetics brand founded in 1904 whose portfolio includes Cover Girl, Kylie Cosmetics, and Lancaster, has announced it will cut up to 700 jobs.
These upcoming layoffs are the next phase of the “All-In to Win” plan the brand first announced in 2020 to establish “a simplified and scaled operating model, reduce complexity across functions and markets, and sharpen its focus on top innovation and market priorities.”
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“We are committed to building a stronger, more resilient Coty that is well-positioned for sustainable growth. When we first announced our All-in to Win program in FY20, at the peak of Covid disruptions, our goal was to boost our margin profile and brand reinvestment firepower through a significantly lower fixed cost structure, supply chain simplification, procurement savings, and strategic revenue management initiatives,” said Sue Nabi, chief executive officer of Coty.
Nabi also says that Coty must “once again adapt and evolve,” but that she believes the changes will lead to strong results for the brand.
“This next phase of our transformation program will further strengthen our operating model and simplify our fixed cost structure,” Coty said in an April 23 press release. “We fully anticipate these changes will strongly position Coty to outperform the beauty market in the coming years, cementing our global leadership position in fragrances while expanding into certain growing and profitable beauty categories, all while steadily expanding our gross margins and EBITDA margins.”
The program is expected to generate annual fixed cost savings of approximately $130M before taxes, including approximately $80M in FY26 and approximately $50M in FY27.
Coty continues to lean into fragrance
While cutting 700 jobs makes it sound as if Coty is in dire straits, the company actually has had some big wins over the last few years. One of them was in the fragrance division, where Coty’s prestige options drove revenue performance. Coty attributes some of this to Burberry Goddess, which it says is its biggest fragrance launch ever. The fragrance was originally released in 2023.
Kylie Cosmetics, Kylie Jenner’s makeup line, also is doing well, as it continues to appear in new locations around the world. Jenner founded the line in 2014 and sold a 51% stake to Coty in 2019 for $600 million. While she is still involved with the development of the brand, she no longer holds a majority stake.
