Burberry has about 1,700 jobs worldwide, accounting for about 18% of its global workforce to reduce employee costs and restore profitability.
The move comes as luxury brands face challenges, including a decline in sales and a weaker appeal to younger consumers.
The retailer said it increased its cost-cutting target to save £100 million a year by fiscal 2027.
The company said the savings will come from lowering “human-related costs” that could affect about 1,700 jobs worldwide.
The latest cost-cutting driver will reduce Burberry’s workforce by nearly one fifth.
The company said “organizational change” is designed to ensure that Burberry is “fit for the future.”
Burberry stock jumped 6.75% or 55.80p to 882.60p after the update. Last year, retailers’ shares fell by about a quarter.
In recent years, investors have seen several failed turnaround plans for Burberry. It felt like a last chance, said Charlie Huggins, portfolio manager for Wealth Club Quality Stocks.
Wednesday, CEO Joshua Schulman The open plan also plans for the announced maximum cost reduction of £40 million, saving a total of £100 million over the next two years. Savings will cost about £80 million to be implemented.
Burberry reported revenues fell 17 per cent to £2.5 billion for the year to March 19.
It lost £3 million in operating losses, compared with a profit of £418 million in the previous year.
The group lost £66 million in the 12 months on March 29, compared with a profit of £383 million in the previous year.
Comparable sales fell 6% in the fourth quarter, down 7% from the average analyst forecast.
The group said it had endured a “challenging first half” and warned of a “difficult macroeconomic background.”
But, Schulman said in a statement: “As brand sentiment improves, as fall and winter collections arrive at stores, we will strengthen the frequency and scope of campaigns.”
