Luxury empire in serious trouble. Cuts jobs and announces a series of changes

Champagne is losing its charm. Moët Hennessy, the prestigious alcoholic beverages division of LVMH, is announcing a significant reduction in employment. This is a sign that serious turbulence is coming to the luxury goods market.

Luxury conglomerate LVMH is announcing major changes to its alcohol division. According to the Financial Times, Moët Hennessy – responsible for brands such as Dom Pérignon , Moët & Chandon and Hennessy – plans to cut around 1,200 employees. That's more than 10 percent of its current global workforce of 9,400. Does this mean its final demise?

One of the most luxurious champagnes in the world - Dom Perignon /Shutterstock

Although the name Moët Hennessy is associated with the height of luxury, behind the scenes, intensive attempts are underway to adapt to the difficult economic reality. In the first quarter of 2025, sales fell by as much as 9% , especially in key markets - the United States and China. At the same time, operating costs have increased by as much as 35% since 2019. As Moët Hennessy CEO Jean-Jacques Guiony said, the current organizational structure was built for a much larger scale of business than it is today.

Both Guiony and his deputy, Alexandre Arnault , have told employees that their goal is to return to pre-pandemic employment levels of 2019.

Moët - French champagne produced by Moët Hennessy / Unsplash, Nico Jacobs

The reductions will largely be carried out through natural staff turnover and redeployment of employees to other areas of the business . Moët Hennessy has already implemented a hiring freeze, and management has not provided an exact time frame for the reductions.

Alexandre Arnault admitted that the situation was unusual.

- Usually, when wine and spirits are down, other segments - like fashion - catch up. Today, however, everything is slowing down - he reportedly told his employees.

Moët Hennessy thus remains the weakest link in the LVMH empire, which owns brands such as Louis Vuitton, Dior and Givenchy.

The situation is further complicated by customs policy – ​​20 percent tariffs on goods from the European Union, imposed by the Donald Trump administration , may hit the export of French alcohol to the American market.