In December, Shiseido shut down the metaverse and web3 projects housed under its emerging technology and platforms division, according to a source recently employed by the company.
The move follows a series of strategic changes within Shiseido, including the elimination of leadership roles at its brands including Clé de Peau. These adjustments were revealed in the months following the release of its third-quarter 2024 results in November. Compared to the year prior, Shiseido’s consolidated net sales fell by 8%, and its operating profit decreased by approximately $69.6 million. The company revised its full-year core operating profit forecast to $259.3 million, down from $407.4 million projected in November.
Shiseido’s web3 and metaverse projects included virtual beauty experiences, NFTs and metaverse collaborations. It partnered with the decentralized world-building platform Decentraland in 2022 and launched digital collectibles tied to its brands including Clé de Peau Beauté in 2021. In 2023, Shiseido released an NFT collection for its luxury skin-care brand Anessa aiming to engage younger consumers. Additionally, Shiseido’s AI with Beauty campaign, launched in 2023, included NFTs that combined AI-generated art and beauty. In 2022, Shiseido-owned NARS joined the NFT trend, releasing NFTs providing exclusive access to limited-edition products and experiences.
Shiseido was unreachable to confirm how many and which positions were affected.
Following the third quarter earnings, Shiseido announced the “Shift 2025 and Beyond” growth plan for 2025-2026. The plan is centered on reinforcing brand foundations and rebuilding the company to profitability, as well as enhancing operational governance. The company intends to concentrate on areas where it holds a competitive advantage, thereby improving profitability. It is aiming for $148.1 million in global cost reductions by the end of 2025.
Other emerging technologies like AI appear to remain priorities for the company. In February 2024, in collaboration with Accenture, Shiseido launched the Voyager platform, integrating AI-driven formulation development to enhance cosmetics creation by analyzing over 500,000 data points from Shiseido’s century of research. Additionally, at CES 2025, Shiseido showcased the Skin Visualizer, a real-time skin analysis device that assesses factors like radiance and resilience without requiring makeup removal or physical contact.
While Shiseido adjusts its focus, its competitor Estée Lauder Companies remains steadfast in its commitment to innovation and emerging technologies.
A source close to ELC shared that the company has no plans to divest from emerging technologies or conduct broad layoffs in the division. For example, last year, it formed an AI and emerging tech task force that includes cross-functional stakeholders. “The group looks closely at how to harness tools and evaluate emerging technologies to see if and how they can serve [our] brands and improve consumer experience,” the source said.
In the past year, generative AI has become a key area of exploration for ELC and its portfolio of brands, including Mac, Clinique and La Mer. In April, led by chief data officer Jane Lauder, ELC launched an AI Innovation lab in partnership with Microsoft. The lab aims to help internal teams quickly spot trends, use data to guide product development and enhance customer experiences.
Estée Lauder has engaged in web3 and the metaverse through several initiatives, including its participation in Decentraland’s Metaverse Fashion Week as the exclusive beauty partner in March 2022. As such, it offered NFT wearables inspired by its Advanced Night Repair Serum. And in August 2022, it participated in Metaverse Art Week, where it provided Proof of Attendance Protocols and immersive brand experiences tied to its heritage. It has not engaged in anything metaverse- or web3-related since Metaverse Beauty Week in 2023. Estée Lauder’s metaverse activations were led by its innovation and technology Department under CIO Michael W. Smith and its global brand management department overseen by Stéphane de La Faverie.
However, ELC layoffs announced in February 2024 affected most divisions at the company. The company reduced its global workforce by 3-5%, equating to approximately 1,800-3,000 employees. The decision was part of a broader restructuring program aimed at increasing profitability and enhancing agility in a challenging international environment. The changes were expected to equate to annual savings of $350 million to $500 million.
In August 2024, ELC announced the appointment of Stéphane de La Faverie as its new chief executive and president, succeeding Fabrizio Freda who retired after 16 years at the helm. In December 2024, according to the Wall Street Journal, Estée Lauder reported already incurring $366 million in costs related to its two-year restructuring plan launched in February. These expenses were primarily employee-related costs and asset write-offs. The company has budgeted $500 million to $700 million to carry out the plan.
Shiseido responded with a statement following the publication of the article. “Shiseido Americas remains committed to innovation, including our Metaverse/Web3 projects and NFT collaborations,” said a representative from the cosmetics company. “To strengthen our connections with consumers even further, going forward, these efforts will be led by the digital teams within our individual brands, supported by our Global Digital Transformation Office in Tokyo. As always, our brands continue to explore emerging technologies and platforms to reach our consumers in exciting new ways.”
