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Moët Hennessy to Reduce Workforce by Over 10% in Restructuring Effort

Moët Hennessy, a division of LVMH, is set to downsize its workforce by more than 10% as part of a strategic move to revitalize its performance. Jean-Jacques Guiony, the chief executive of Moët Hennessy, along with his deputy Alexandre Arnault, announced plans to bring the workforce back to 2019 levels.

The current headcount of 9,400 will need to be reduced by approximately 1,200 employees, as Guiony highlighted that despite the division’s revenues being at 2019 levels, costs had surged by 35% since then. The executives aim to achieve these reductions through natural attrition and reallocating some staff to vacant positions within the organization.

According to a spokesperson from Moët Hennessy, the restructuring will primarily focus on managing natural turnover and not filling vacant roles. The timeline for these job cuts has not been disclosed.

Challenges Faced by Moët Hennessy

Guiony and Alexandre Arnault took over leadership roles at Moët Hennessy in February with the objective of enhancing performance amid a challenging global market for alcohol sales. LVMH’s drinks division experienced rapid growth between 2019 and 2022 but has encountered difficulties recently. Moët Hennessy reported a 9% decline in organic sales in the first quarter, compared to a 3% decrease across LVMH as a whole.

Arnault acknowledged the unique predicament faced by LVMH, where all major divisions are struggling simultaneously. He emphasized the need for strategic measures to navigate through these tough times.

Previous Plans for Workforce Reduction

Internal documents revealed that headcount reductions were already being considered at Moët Hennessy before the current leadership took over. Hiring freezes were implemented in the latter half of 2023, and efforts to trim hundreds of roles were initiated last year. Reports indicate that around 70 employees in China were let go out of a target of approximately 100 in 2024.

Guiony reassured the staff that despite the current challenges, the situation will improve over time. He also highlighted the additional uncertainty posed by US tariffs.

The restructuring at Moët Hennessy reflects the division’s commitment to adapting to evolving market conditions and ensuring long-term sustainability.