Sephora is cutting 117 full-time jobs, about 7% of its full-time corporate workforce, as part of a restructuring process, the company confirmed to Retail Dive on Monday. "A number" of those are corporate roles associated with Sephora's J.C. Penney partnership "to reflect the JCPenney store base reductions," a company spokesperson said.
The beauty retailer will also be adding 132 net new full-time jobs and "decreasing our reliance on contractors." The layoffs are in roles that the company says are "no longer aligned with our changed priorities."
While a review of Sephora's corporate structure and organization has been underway for over a year, the pandemic pushed the beauty retailer to accelerate the process. "We have completed the process and developed a new structure that will enable our teams to be more effective and agile, and better positions our future operations," the spokesperson said.
Even before J.C. Penney filed for bankruptcy this year, there were hints that the department store's 14-year relationship with Sephora was not on firm footing.
In early May, the two argued in court over J.C. Penney's allegations that Sephora threatened to abandon their partnership if J.C. Penney didn't shorten the contract term of the deal. They then resolved the dispute and said in a joint press release they had made "mutually beneficial revisions" to their partnership.
Prior to the bankruptcy, the beauty retailer operated shop-in-shops in 600 of J.C. Penney's 850 stores, but the department store's Chapter 11 filing included plans to shutter around 242 stores, which has clearly impacted some of Sephora's shop-in-shop locations. Despite acknowledging the impact of the pandemic on the restructuring, Sephora said the changes were focused on moving the company toward "growth in a rapidly evolving environment."
"We will have leaner and more dynamic teams, with a sharp focus on the new environment that all retailers face, as well as new centers of excellence in areas of growing importance to the business (store and online experience)," the spokesperson said.
Indeed, in February, Sephora announced its largest expansion in North America, with plans to open 100 stores in 2020. Those locations were smaller formats focused in locations outside of the mall. While rival Ulta has pulled back on expansion plans as a result of the pandemic, a Sephora spokesperson in April said the company had nothing further to share when asked if the health crisis would impact its own plans. Sephora did not immediately respond to another request for comment on the subject.
As the company makes room for positions focused on stores and online experience, among other areas, those laid off will have a chance to interview for the new positions.
"While we have approached this reshaping purposefully and we are confident these organizational changes will enable Sephora to evolve, these were exceptionally difficult decisions to make," the spokesperson said. "We are deeply grateful for the consistent dedication by the entire Sephora organization, which has been instrumental to our continued growth throughout this transition."