Moët Hennessy will shrink its workforce by more than 10% as new-installed executives in LVMH’s weakest division seek to revitalize their performance.
Moët Hennessy CEO Jean-Jacques Guiony and his deputy Alexandre Arnault told staff this week in the wine and spirit department that they plan to cut the workforce to 2019 levels.
Guiony said the total of 9,400 people will now be down by about 1,200, adding that even though costs have increased by 35% since then, the sector's revenue is still at 2019 levels.
"This is built for an organization with a larger scope of business," Guyni said in an internal video seen in the Financial Times. "People realize that … this (rebuilding sales) is not going to happen anytime soon."
Guiony and Arnault said the reduction will be through natural churn and transfer some employees to vacancies in other parts of the organization. They did not give a timetable for layoffs, which was first reported by French news media La Lettre.
A spokesman for Moët-Hennessy said: "While Moët-Hennessy's business has returned to its 2019 level, Moët-Hennessy announced yesterday that it intends to reorganize its organization and gradually return to its staffing level in 2019, mainly through managing its natural mistakes and not filling vacant positions."
Guiony and Alexandre Arnault, sons of LVMH CEO and Chairman Bernard, arrived in Moët Hennessy in February with a mission to improve performance amid frustrations in the global alcohol market.
LVMH's beverage division has grown rapidly between 2019 and 2022, but has been under pressure since then. Moët Hennessy's organic sales fell 9% in the first quarter, while LVMH's overall organic sales fell 3%.
Alexandre Arnault told staff that LVMH had encountered some crises over the years, but what made it "a little unique" is that all its largest divisions were struggling.
"Usually at LVMH, when wine and spirits are not going well, fashion is doing well, or some businesses are doing differently. Things are not going well now," he said.
Internal company documents seen by FT show that the number of people has decreased before Moët Hennessy’s current leadership talent is in place.
The recruitment freeze has been around since the second half of 2023, with managers hoping to lay off hundreds of roles last year. According to a communication seen in Indiana, UK, at least 70 people in China were released in 2024.
Guiony told employees that he added: "It's a bad situation, but it's going to get better. It's a cycle." He added that U.S. tariffs add another kind of uncertainty.