Over a thousand jobs at Moët Hennessy face termination as the company announces a 10% workforce reduction, according to recent reports.
In a surprising move, luxury conglomerate Moët Hennessy, part of the LVMH group, plans to axe around 1,200 jobs as part of a major restructuring.
The news comes as the company grapples with a financial slump, with organic sales diving by a staggering nine percent. This downward trend seems to have been happening since 2022, putting immense pressure on the wine and spirits division of LVMH.
The new CEO, Jean-Jacques Guiony, bluntly admitted that the department's structure was designed for a larger company. Instead of trying to adapt the existing structure, Guiony aims to return the company to its 2019 level of success.
In a recent internal video message, Guiony stated that the job losses were necessary due to the current market challenges. Interestingly, reports suggest that the decision to cut jobs was already in the works before Guiony took over as CEO.
The drinks manufacturer has seen significant growth between 2019 and 2022, but the success was short-lived. In the first quarter of this year, organic sales plummeted, causing an overall three percent decline in LVMH's sales.
The COVID-19 pandemic initially disrupted supply chains and consumer behavior, leading to a rebound but later causing further economic issues. Add to that trade tensions and inflation, and you've got a perfect storm impacting the cognitive and champagne markets. In fact, China even initiated an anti-dumping investigation into European wine-based spirits in response to EU policies on Chinese imports.
Faced with these challenges, the company has decided to streamline its operations and realign its workforce to match its 2019 level of employment. The restructuring involves reducing the workforce by around 1,200 positions, mainly by not replacing departing employees or moving staff into other vacancies within the group.
The COVID-19 pandemic coupled with various economic factors has tested the resilience of Moët Hennessy, and the company seems to be taking drastic measures to adapt and thrive again. Only time will tell if these efforts will pay off.
- The restructuring in Moët Hennessy, a subsidiary of LVMH, will see a decrease in industry finance, with the elimination of approximately 1,200 positions by 2023, as announced by the new CEO, Jean-Jacques Guiony.
- The decision to restructure, aimed at returning Moët Hennessy to its 2019 level of success, comes amidst a challenging business environment marked by a financial slump and a nine percent decline in organic sales since 2022.
- In the face of declining sales, exacerbated by the COVID-19 pandemic, trade tensions, and inflation, Moët Hennessy plans to streamline its operations and realign its workforce, mirroring its 2019 employment levels.
- This restructuring move by Moët Hennessy, part of the luxury conglomerate LVMH, is a reflection of the increased pressure on the wine and spirits division of the group, a sector that has seen significant growth between 2019 and 2022 but has since faced a downturn and a plummet in organic sales in the first quarter of 2023.
