Burberry to cut 20% of workforce, shares jump

Burberry shares surged 18% on Wednesday after the British luxury brand announced plans to shed 1,700 jobs or around a fifth of its global workforce to cut costs to help revive its performance.

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Burberry is in the early stages of a turnaround effort led by Chief Executive Officer Joshua Schulman, who is seeking to reverse the group's years of underperformance versus luxury rivals.

The job cuts over the next two years will affect mostly office roles, and a night shift at Burberry's trench coat factory in Castleford, England, will be cancelled.

Mr. Schulman said having two shifts at the factory had resulted in "overproduction," and cutting the night shift was key to maintaining Burberry's manufacturing footprint in the UK.

Mr. Schulman, formerly at Coach and Jimmy Choo, took over at Burberry last year and shifted its strategy to focus on marketing Britishness and selling more trench coats and scarves after the brand was bruised by product missteps, excessive price hikes, and a broader luxury downturn.