LVMH is cutting 10% of the workforce at its wine and spirits division, Moët Hennessy, as the group contends with slowing luxury demand, rising costs, and mounting global trade tensions.
The job cuts, expected to affect around 1,200 staff, will reduce Moët Hennessy’s headcount to pre-pandemic levels, the Financial Times reported. In an internal briefing, CEO Jean-Jacques Guiony and deputy CEO Alexandre Arnault — son of LVMH chairman Bernard Arnault — acknowledged that while sales had returned to 2019 levels, costs had surged by 35%.
“This was an organisation that was built for a much larger size of business,” Guiony reportedly told staff. “People realise … that this [rebuilding sales] is not going to happen anytime soon.”
A precise timeline for the job reductions has not been confirmed.
Moët Hennessy, which owns iconic brands including Belvedere vodka, Krug, Veuve Clicquot, and Moët & Chandon, has seen revenues falter in 2024 amid weakening demand in its critical US and Chinese markets. The division’s organic sales fell 9% in Q1, lagging behind other LVMH units.
The broader LVMH group has also faced challenges, with fashion and leather goods sales—its largest segment—down 5% in Q1, marking the third consecutive quarterly decline.
Moët Hennessy’s recovery is further complicated by international trade tensions. The division has been hit by President Trump’s 20% reciprocal tariff on European Union goods, including French wine and spirits, and China’s retaliatory duties on European brandy—affecting key products like Hennessy cognac.
Last month, the French wine and spirits exporters group FEVS warned that exports to the US could fall by at least 20% this year due to tariffs. The US and China represent Moët Hennessy’s most important international markets.
Alexandre Arnault, appointed deputy CEO in November 2024, is tasked with revitalising the struggling division. However, the current economic environment—with inflation-driven costs, sluggish consumer spending, and geopolitical trade disputes—will make a turnaround challenging.
The layoffs highlight a broader trend across the luxury sector, which has faced softening post-pandemic demand and heightened sensitivity to macroeconomic and political uncertainty. LVMH, often viewed as a bellwether for global luxury, now faces the task of balancing operational restructuring with preserving its prestige and growth momentum.
Paul Jones
Harvard alumni and former New York Times journalist. Editor of Business Matters for over 15 years, the UKs largest business magazine. I am also head of Capital Business Media’s automotive division working for clients such as Red Bull Racing, Honda, Aston Martin and Infiniti.
