After news began circulating earlier this week that L’Oréal is considering merging its Hong Kong office with its Mainland China operations, which would result in the layoff of over 200 employees, the French beauty company issued a statement refuting the claims.

“The recent media report regarding L’Oréal Hong Kong’s job cut information is inaccurate,” a Chinese company representative told WWD in an email.

“Hong Kong and the neighbouring cities in the Greater Bay Area are increasingly interconnected. To capitalize on the integrated market ecosystem and shifting consumer dynamics, we are transforming to a new and modern organization structure that drives mutual benefits and stronger synergy between our Hong Kong and Mainland organizations,” the company added in the statement.

L’Oréal added that the new organization will help create a synergy between “Hong Kong’s retail excellence and Mainland China‘s strong capabilities in digital and e-commerce.”

Local media reported that the company notified employees at the end of June that its Hong Kong division will merge with its Mainland China operations. It was reported that over 200 jobs will be slashed by the end of September. A number of employees will be relocated to nearby Guangzhou, while a few frontline employees will be left to maintain basic operations.

A Hong Kong employee told HK01, a local news organization, that the company’s Hong Kong operations are profitable and the severance package tends to be “generous,” based on precedent.

L’Oréal’s Hong Kong division was established in 1983 and currently employs around 300 people, excluding retail personnel, according to HK01.

Facing a challenging local market, the French beauty giant is aiming for around 5 percent growth in China this year, the company’s president of North Asia and chief executive officer of L’Oréal China Vincent Boinay unveiled at a Shanghai conference this March.

The company said that China was slightly better than foreseen in its latest first-quarter 2025 period. Meanwhile, the company’s travel-retail Asia business remains highly negative in sell-out, both on the duty-free island of Hainan, China, and in South Korea.