Burberry to Cut 1,700 Jobs as Luxury Retailer Battles £3 Million Loss

British luxury fashion house Burberry has announced plans to eliminate 18% of its global workforce by 2027, resulting in approximately 1,700 job losses across the organization. The dramatic restructuring comes as the iconic brand reported losses of £3 million ($4 million) during its latest financial year.

The workforce reduction represents the most visible aspect of a comprehensive turnaround strategy under CEO Joshua Schulman, who took the helm in July 2024.

Financial Pressure Forces Strategic Reset

Burberry's financial struggles have been mounting. Revenue fell sharply in the 12 months to March 29, 2025, creating urgent pressure for restructuring after years of declining performance.

The company's stock had lost 66% of its value since reaching an all-time high in April 2023, signaling deep investor concerns about its direction and market position.

These financial challenges reflect broader headwinds in the luxury sector, where changing consumer preferences and economic uncertainty have disrupted traditional business models.

Return to Heritage and British Identity

At the core of Burberry's turnaround plan is a strategic pivot back to its heritage products. Schulman is implementing a refocus on the brand's iconic trench coats and scarves after previous leadership pushed into high-fashion territory with elevated pricing.

This shift acknowledges a fundamental truth about Burberry's market position. The brand's historical strengths and consumer associations center on its British heritage and signature products rather than competing directly with ultra-luxury fashion houses.

"The customers we want to grow, who have been declining for three years, are now excited about what they see," Schulman stated during an investor presentation, highlighting early positive signs for the renewed focus on "Britishness" and heritage products.

Manufacturing Adjustments

The job cuts will primarily affect office roles, but operations will also see significant changes. A night shift at Burberry's trench coat factory in Castleford, England, will be cancelled.

Schulman explained that having two shifts had resulted in "overproduction" and that cutting the night shift was key to maintaining the company's manufacturing footprint in the UK. This move aligns with luxury sector best practices, where controlled production supports premium positioning.

By 2027, Burberry aims to unlock £100 million ($133 million) in annual savings through these operational changes.

Market Responds Positively

Despite the significant workforce reduction, investors have responded favorably to Burberry's new direction. Shares surged 18% following the announcement, suggesting strong confidence in Schulman's strategy.

The positive market reaction indicates investors believe the return to heritage positioning could reverse Burberry's fortunes after years of underperformance.

This strategic reset involves a revised pricing architecture described as "good, better, best," with outerwear seeing 20% of sales at top-tier pricing and the majority at more accessible price points.

Industry Implications

Burberry's dramatic pivot carries significant implications for the broader luxury fashion sector. The move signals a potential industry-wide recalibration toward authentic brand identity over aspirational positioning.

Several luxury brands have struggled with similar challenges in recent years, attempting to move upmarket only to find their core customers alienated and new luxury consumers unconvinced.

Burberry's return to its heritage strengths may influence other fashion houses to reassess their market positioning and product strategies. The focus on signature products rather than chasing fashion trends suggests a more sustainable approach to luxury brand building.

Future Outlook

While the job cuts represent immediate pain for affected employees, the long-term strategy aims to secure Burberry's position for future growth. The 169-year-old company faces the challenge of balancing heritage with contemporary relevance.

Industry analysts will be watching closely to see if the renewed focus on British identity and signature products can rebuild Burberry's customer base and restore profitability.

The coming months will reveal whether this strategic reset represents the beginning of a successful transformation or merely another chapter in the ongoing challenges facing heritage luxury brands in a rapidly evolving market.