Burberry implements major job cuts amid executive pay controversies

In the United Kingdom, Burberry, a luxury fashion brand, has faced significant challenges resulting in a decline in its financial performance and brand perception. The company recorded an annual loss exceeding $4 million by March 29, 2025, a stark contrast to a profit of over $566 million noted the previous year. This downturn was attributed to both a decline in the global luxury goods market and a lack of brand diversification. To address these issues, Burberry has embarked on a significant cost-cutting strategy which includes plans to reduce its workforce by around 1,700 employees worldwide by 2027, representing roughly a fifth of its global workforce. This decision comes in the aftermath of the appointment of Josh Schulman as the new chief executive, who was brought on board with a mandate to restore Burberry’s brand strength and profitability. However, these layoffs have raised eyebrows as Schulman has received hefty compensation packages, including over $3.5 million in his first nine months, along with potential bonuses based on the company's stock performance. The optics of such compensation during a time of job cuts led to criticism despite Burberry's defense citing shareholder support for Schulman's pay structure. In his ongoing efforts, Schulman has initiated the 'Burberry Forward' program, aimed at redefining the brand's image to capture its iconic British heritage while retaining relevance in a changing luxury landscape. This program was highlighted during a runway show at Tate Britain that focused on the brand’s heritage and classic offerings, despite the macroeconomic challenges. Schulman's commitment coupled with the company's restructuring efforts aims to stabilize Burberry's operations and improve its market standing amidst an ever-competitive luxury market landscape.