After calling Westchester home for decades, cosmetics mainstay Neutrogena Corp. is uprooting entirely out of the Los Angeles area.
The company is relocating to Skillman, New Jersey, where it will be alongside its parent, the publicly traded Kenvue Inc. Accordingly, Neutrogena is laying off its local employees in three waves while offering the majority of them the option to relocate. The company expects to finalize its operations here by August, when the last of its area employees are to be laid off.
The move comes as Kenvue executives hope to improve what they view as the Neutrogena brand’s lackluster performance in the previous fiscal year. It also represents the latest major business exodus from L.A.
Neutrogena is laying off a total of 84 employees in L.A., starting with 44 workers from April 12 through Friday. Another 39 will be let go from June 21-July 5, while the last will be dismissed sometime between Aug. 16-30.
In its notice to the California Employment Development Department, Kenvue said it was also closing its Westchester facility – located at 6080 Center Dr. – altogether, the result of a “business decision” to consolidate operations at the New Jersey base.
The eliminated positions include 34 managers, 18 specialists, 15 analysts, eight directors, three supervisors, three administration assistants and a buyer, a sales representative and scientist. Of the total, 74 were offered either relocation or reassignment to another Kenvue location.
How the company got started
Formed in 1930 initially as Natone, the company rebranded as Neutrogena in 1962 and went public in 1973. Pharmaceutical behemoth Johnson & Johnson acquired Neutrogena in 1994 in a $924 million transaction. Last year, Johnson & Johnson spun off its consumer health division into the independent Kenvue, which included popular brands like Aveeno, Band-Aid, Tylenol – and Neutrogena.
In the company’s 2023 earnings conference call in February, Kenvue Chief Executive Thibaut Mongon highlighted certain triumphs within Neutrogena last year – the brand’s Hydro Boost gel cream sales in Germany drove growth in the Europe-Middle East-Africa region, while the brand saw doubled sales in Latin America. However, lagging U.S. sales plagued the brand and could not be saved even with a fourth-quarter recovery plan. The company reported an 8% drop in sales for skin health and beauty last year, a segment driven largely by Neutrogena.
Mongon indicated that, as a result of significant planning, more dramatic changes were to follow.
“Restoring Neutrogena to the level of growth we know the brand is capable of is a priority for me and for the team. We know our brand equities are healthy and our products resonate with consumers in the category,” he said. “However, we must improve our in-store execution capabilities to drive stronger demand for our brands, better communicate our value proposition to consumers, launch innovation successfully and, finally, support our brands with a robust level of marketing investments.”
Kenvue informed the EDD of the L.A. layoffs and office closure on Feb. 12, four days after the company’s earnings conference call. A company executive told Bloomberg Finance this month that the decision was made in effort to “boost growth and improve collaboration.”
L.A. has plenty of other cosmetic brands
Those laid off and staying in Southern California may be able to pivot their skillsets elsewhere here, given the glut of smaller cosmetic brands that remain.
Among the larger players are The Honest Co. in Playa Vista. The digital-first company, founded by actress Jessica Alba in 2011, produces personal care products free of petrochemicals and other synthetic fragrances. The company just posted its first profitable quarter since going public in 2021 and has a market cap hovering around $302 million.
Meanwhile, Santa Monica-based Beautycounter this year brought back founder Gregg Renfrew as its chief executive and also entered the perfume market. And Anastasia Beverly Hills recently debuted a pigmented skin balm as an alternative to the usual liquid-based offerings.
Legacy brands trickle outward
The exit for Neutrogena is just the latest in a flurry of mergers and moves since the start of the millennium that have taken homegrown companies out of L.A.
Defense contractor giant Northrop Grumman moved from Century City to Virginia in 2011, though it remains a large employer in Los Angeles County. Hilton Worldwide Holdings Inc. moved out of Beverly Hills in 2009. Occidental Petroleum moved from Westwood to Houston in 2014.
Last year, Santa Monica-based Activision Blizzard was acquired by tech giant Microsoft in a blockbuster deal that kept the local operations but resulted in substantial layoffs. Popular Mexican food producer Cacique Foods LLC last year moved its corporate headquarters from Monrovia to Irving, Texas, and also shuttered its dairy plant in City of Industry to shift that production to Texas.
