Feb. 5 (Bloomberg) -- Estee Lauder Cos., the maker of Clinique and Bobbi Brown cosmetics, said it will cut 2,000 jobs as declines in makeup and perfume sales reduced second-quarter profit.

The job cuts, which represent 6 percent of the workforce, will occur over the next two years, New York-based Estee Lauder said today in a statement. That and other measures, including inventory reduction and a freeze on hiring and merit raises, will reduce expenses by $450 million to $550 million over the next four years, the company said.

The highest monthly U.S. unemployment rate in almost 16 years, restrictive credit and falling home values have led consumers to cut non-essential spending. As a result, companies have implemented plans to reduce costs. Macy’s Inc., the second- largest U.S. department-store company, is eliminating 7,000 jobs, and Liz Claiborne Inc., the maker of Kate Spade handbags, said this week it’s cutting about 725 jobs.

“We’re looking to reduce and eliminate the duplication of activities that are not visible to the consumer,” Chief Executive Officer William Lauder said today in a telephone interview. “We have to be very vigilant in understanding what motivates the consumer, what gives her a level of confidence to shop.”

‘Tackling the Right Things’

Estee Lauder’s net income fell 30 percent to $158 million, or 80 cents a share, in the three months through Dec. 31 from $224.4 million, or $1.14, a year earlier. Analysts estimated profit of 77 cents, the average of 12 projections compiled by Bloomberg, after Estee Lauder said on Jan. 16 profit would range from 75 cents to 82 cents.

“Their targets may be lower than some investors wanted,” said Ali Dibadj, an analyst with Sanford C. Bernstein & Co. in New York. “But they are tackling the right things.”

Revenue declined 13 percent to $2.04 billion, hurt by a consumer-spending slowdown at department stores and in air travel, which affects duty-free shopping, the company said in the statement. Ten analysts predicted revenue of $2.03 billion.

Estee Lauder rose 63 cents, or 2.4 percent, to $26.82 at 4:10 p.m. in New York Stock Exchange composite trading. The shares dropped 29 percent last year.

Third-quarter profit will remain little changed or rise as much as 8 cents a share, Estee Lauder said. Full-year profit will be $1.30 to $1.60 a share, excluding the impact of currency translation. Sales, excluding the effects of currency, may fall as much as 3 percent, it said.

The company expects the economic decline to last through the next 12 to 18 months and sees the economy having a “dramatic effect” on third-quarter profit, executives said on a conference call today. Estee Lauder will focus on expanding sales in emerging markets such as China and look to broaden its MAC and Bobbi Brown lines, executives said.

To contact the reporter on this story: Allison Abell Schwartz in New York at aabell@bloomberg.net.

Last Updated: February 5, 2009 16:17 EST