Pandora cuts staff to protect profit
The proposed organisational changes are expected to reduce annual costs by around AUD$31.45 million from 2019, and will affect 218 employees based in Thailand.
“We have made important progress on our 2022 strategy since we launched it last year, and are on the right long-term direction for Pandora,” said CEO Anders Colding Friis.
“The adjustments we announce today will reduce complexity and free up resources that we can add to our strategic priorities. The adjustments are also – together with our procurement program – necessary to protect our profitability.
“Sadly, the changes mean that good employees will lose their jobs, and we are supporting them in the best possible way.”
The jewellery manufacturer also announced changes to “strengthen cooperation” between sales, marketing and merchandising; implement a centralised operations and supply chain structure to streamline manufacturing; and shift more resources to strategic priorities such as digital and e-commerce.
The changes come less than a month after the company committed to reducing its retail prices in China in order to combat an emerging ‘grey market’, potentially losing revenue in a large area of growth for the company – having grown by double or triple digits each year since entering the Chinese market in 2010.
The reduction amounted to an average of 15 per cent off retail prices, both on the online store and the Tmall flagship store.
“This price reduction across our jewellery assortment is one element in our strategic programme to limit grey market trading of our products in China,” said Kenneth Madsen, president of Pandora Asia-Pacific.