Parent Company of Victoria’s Secret Will Cut 15% of its Corporate Workforce

The parent company of Victoria’s Secret, L Brands, has said this week that it would be cutting 15% of its corporate workforce.

The company is preparing to cut 15% of its corporate workforce, or roughly 850 jobs as it plans to save about $400 million annually through its cost-cutting efforts.

L Brand said it expects to see about $175 million of savings in fiscal 2020. It also expects to record about $75 million of pretax severance costs in the second quarter of 2020, specifically tied to the job cuts.

“Decisions relating to our workforce are incredibly difficult and not taken lightly, but these actions are necessary to best position our company for the long-term,” L Brands Chief Executive Andrew Meslow stated. According to the CEO, the company is working toward improving the profitability of its embattled Victoria’s Secret lingerie business.

As of Feb. 1, the company employed about 94,400 employees, 68,900 of those being part-time.

It was in May that the company said it planned to permanently about 250 Victoria’s Secret and Pink stores in the U.S. and Canada in 2020, or roughly a quarter of its shops in North America.

“We would expect to have a meaningful number of additional store closures beyond the 250 that we’re pursuing this year … meaning there will be more in 2021 and probably a bit more in 2022,” Stuart Burgdoerfer, the interim CEO of Victoria’s Secret, said then.

A preliminary look at second quarter financial results were also offered before the release on August 19th. Net sales are forecast to be down 20% overall compared with a year ago. The company is expecting to post a 40% decline at Victoria’s Secret.

“Sales at both businesses have been strong and have exceeded the company’s expectations,” the company said in its press release.

According to BMO Capital Markets analyst Simeon Siegel remarked, “It’s a classic example of a brand that stretched too far in pursuit of growth. But its revenues are the confirmation it still has tremendous buy-in from consumers.”

Disclaimer: We have no position in L Brands Inc. (NYSE: LB) and have not been compensated for this article.