Shiseido is implementing a large-scale restructuring in an effort to turn around its US operations. The company plans to cut about 300 jobs, more than 15% of its US workforce, to speed up profit recovery.
Last month, the company told Business of Fashion (BoF) the following regarding the staff reductions:
“Shiseido Americas has undertaken a business transformation to return to growth and profitability. As part of this process, we have made the difficult decision to eliminate certain roles within the company and a number of our employees have been adversely impacted. We are grateful to our departing colleagues for their contributions to Shiseido Americas and we will provide these employees with transition support.”
Background: Drunk Elephant at the Core of Declining Performance
On August 6, Shiseido announced that consolidated net sales for the first half of 2025 (January–June) fell 7.6% year on year to $3.25 billion (¥469.8 billion). In addition to sluggish performance in China and the travel retail business, a sharp drop in sales at Drunk Elephant — the skincare brand acquired in 2019 for about $608 million — severely impacted results. The brand’s sales plunged 57% in the first half and fell 43% in the second quarter alone.
In the Americas, sales fell 10.1% year on year to $356 million (¥51.4 billion), while core operating losses widened to $40 million (¥5.8 billion), more than double the roughly $17 million (¥2.5 billion) loss in the same period last year. Drunk Elephant also underperformed in Europe, posting a $1.3 million loss in the first half.
Restructuring and Cost Reduction Plans
CFO Ayako Hirofuji explained, “Profitability in the US has declined, so we have brought forward restructuring.” The company aims to cut $169 million in fixed costs by the end of 2025 and will review procurement and production systems to offset up to $20 million in potential US tariff impacts. Shiseido also plans to launch new skincare products this fall in a bid to return its Americas operations to profitability by 2026.
In its official statement on Drunk Elephant, the company identified “a lack of targeting based on clear customer understanding,” “unclear brand values,” and “a lack of differentiation through breakthrough innovation” as key challenges. In 2025, Shiseido will focus on clearing excess inventory and reclarifying the brand’s value proposition, with plans for a brand reset campaign in 2026 centered on product strengths and merchandising.
Core Brand Resilience and Management Changes
Meanwhile, the company’s core brand portfolio performed steadily. NARS Cosmetics posted a 7% increase in the second quarter and a 2% rise for the first half, while Clé de Peau Beauté saw 3% growth in both the second quarter and first half. However, the Shiseido flagship brand declined 4% year on year.
There were also shifts in the management structure. In April 2025, Americas CEO Ron Gee resigned, followed by EMEA Region Chairman Franck Marilly in May. Alberto Noé, CEO of EMEA, is serving as interim head of the region in addition to his current role.
With the US market under pressure, multiple leadership changes, and a stark contrast between strong-performing core brands and an underperforming Drunk Elephant, Shiseido’s focus will be on whether restructuring and brand strategy overhauls can return the company to a growth trajectory by 2026.
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