LVMH is reducing 10% of the workforce in its division of wines and liquors, Moët Hennessy, since the group contains the deceleration of luxury demand, the increase in costs and growing global commercial tensions.
Employment cuts, which are expected to affect around 1,200 employees, will reduce Moët Hennessy staff to pre-pandemics levels, Financial Times reported. In an internal informative session, the Jean-Jacques Guiony CEO and the vice president of the CEO Alexandre Arnault-are from the president of LVMH, Bernard Arnault, noticed that, while the sales had returned to the 2019 levels, they had increased by 35%.
“This was an organization that was built for a much larger size of business,” Scripty told staff. “People realize … this [rebuilding sales] It will not happen soon. “
A precise timeline for work reductions has not confirmed the leg.
Moët Hennessy, owner of iconic brands, including Belvedere Vodka, Krug, Veuve Clicquot and Moët & Chandon, has seen hesitated income in 2024 amid the weakening of demand in the critical markets of the United States and Chinese. Organic sales of the division fell 9% in the first quarter, delaying behind other LVMH units.
The broader LVMH group has also faced challenges, with fashion sales and leather items, its largest segment, 5% lower in Q1, marking the third consecutive quarterly decline.
Moët Hennessy’s recovery is further complicated by international commercial tensions. The division has been affected by the 20% reciprocal rate of President Trump on the assets of the European Union, including French wine and spirits, and China’s retaliation dekens over the European brandy, preventing key products such as Hennessy Cognac.
Last month, the French wines and liquor exporters group Fevs warned that exports to the United States could fall by at least 20% this year due to rates. The United States and China represent the most important international markets of Moët Hennessy.
Alexandre Arnault, appointed CEO attached in November 2024, has the task of revitalization of the difficulties division. However, the current economic environment with costs promoted by inflation, the slow expense of consumers and geopolitical commercial disputes will make a challenge.
The dismissals highlight a broader trend throughout the luxury sector, which has faced the softest demand after pandemic and sensitivity to macroconomic and political uncertainty. LVMH, or seen as a stimulus for global luxury, now faces the task of balanceing operational restructuring with the preservation of its prestige and growth impulse.
Paul Jones
Harvard Alumni and former New York Times journalist. Business Matters editor for about 15 years, the largest commercial magazine of the UKs. I am also head of the Automotive Capital Division Business Media who works for clients such as Red Bull Racing, Honda, Aston Martin and Infiniti.
