LVMH cuts 10% of Moët Hennessy employees amid global slowdown in luxury goods and trade tariffs
LVMH cuts 10% of its workforce in its wine and spirits division Moët Hennessy, as the group sees slowing demand for luxury goods, rising costs and growing global trade tensions.
According to the Financial Times, layoffs are expected to affect about 1,200 employees, which will reduce Moët Hennessy’s head at the pre-pandemic level. Jean-Jacques Guiony, son of LVMH Chairman Bernard Arnault, CEO of Jean-Jacques Guiony and Deputy CEO Alexandre Arnault, admitted in an internal briefing that while sales returned to 2019 levels, costs soared by 35%.
“This is built for an organization with a larger scope of business,” Guiony reportedly told employees. “People realize…this [rebuilding sales] Not going to happen anytime soon. ”
The exact schedule for lowering work has not been confirmed.
Moët Hennessy, who owns iconic brands including Belvedere Vodka, Krug, Veuve Clicquot and Moët & Chandon, has weakened demand in its key U.S. and Chinese markets in 2024. Organic sales in the sector fell 9% in the first quarter, lagging behind other LVMH units.
The broader LVMH group also faces challenges, with sales of fashion and leather goods (the largest segment) down 5% in the first quarter, a third consecutive quarter decline.
The recovery of Moët Hennessy complicated international trade tensions. The department was hit by President Trump's mutual tariffs on EU goods, including French wine and spirits, and China's retaliatory tariffs on European brandy, which affected key products such as Hennessy Cognac.
Last month, French wine and spirits exporter group FEVS warned that exports to the United States could fall at least 20% this year due to tariffs. The United States and China represent Moët Hennessy's most important international market.
Alexandre Arnault was appointed deputy CEO in November 2024 with a mission to revitalize the struggling department. However, the current economic environment (inflation-oriented costs, slow consumer spending and geopolitical trade disputes) will make turnaround challenges.
The layoffs highlight a broader trend across the luxury sector that faces post-pandemic demand and increases sensitivity to macroeconomic and political uncertainty. Often seen as the leader in global luxury goods, LVMH is now facing the task of balancing operational restructuring with maintaining its reputation and growth momentum.
