In the midst of one of the toughest consumer environments in decades, Estee Lauder Cos. (EL) on Thursday announced an ambitious four-year turnaround plan, which includes a 6% reduction in its work force and an immediate freeze in merit pay increases.

As expected, the beauty company posted lower fiscal second-quarter results, following a cut in its sales and earnings forecasts last month.

"We know this recession is likely to be longer, deeper and tougher than any in recent memory," said Chief Executive William Lauder in the company's earnings call. "We anticipate being able to withstand the pressure."

Estee Lauder unveiled a four-year plan that would see it cut 2,000 jobs over the next two years in an effort to save up to $550 million over four years. The company also said it plans to impose an immediate company-wide freeze in merit pay increases, and it will continue a hiring freeze except for necessary positions.

The strategic plan also aims to boost non-U.S. sales to more than 60% of overall revenue, with the Asia-Pacific area expected to lead growth. One analyst estimates non-U.S. sales at about 58% now. The company also gave an operating margin goal of 12% to 13% by fiscal 2013. It also said it wants to increase its marketshare in the beauty segment by at least 1 percentage point every year.

The growth plan was somewhat more ambitious than at least one analyst's estimates.

"It is more aggressive than we expected," said Linda Bolton Weiser, an analyst with Caris & Company, saying Estee Lauder's strategic plan implies a 20% compound annual growth rate over the next four years, while her firm estimated last year a growth of 15% over the next five years.

The success of the strategic plan will depend on Estee Lauder's execution as well as how quickly the economy recovers, said Ali Dibadj, a Sanford C. Bernstein & Co. analyst.

But the economic environment should continue to be difficult in the near term and isn't expected to improve, said Chief Executive Lauder.

The beauty industry - usually thought to be resilient in bad economies - is coming under hefty pressure from rising unemployment, declines in consumer spending and dismal retail sales. Some observers had expected upscale makeup and skin-care products to hold their own during the downturn, but consumers who were already buying fewer sweaters and handbags have finally begun to sacrifice their beauty regimens to the recession as well.

For the quarter ended Dec. 31, Estee Lauder's net income fell 30% to $158 million, or 80 cents a share, from $224.4 million, or $1.14 a share, a year earlier. Net sales fell 12% to $2.04 billion, with half the decline due to the stronger dollar.

Last month, Estee Lauder cut its view to earnings of 75 cents to 82 cents a share on a 6% sales drop in constant-currency terms.

Gross margin rose to 75.1% from 74.9%.

During past economic slowdowns, shoppers perceived a new tube of lipstick as an affordable indulgence. But in the quarter, sales of Estee Lauder's makeup brands, which include Clinique, MAC and its namesake line, fell 12%.

Sales of skin-care products fell 7.1%.

Looking ahead, Estee Lauder affirmed its lowered fiscal-year outlook and projected third-quarter earnings of as much as 8 cents a share. The company said its outlook assumed the recession would last at least another 12 to 18 months. Wall Street expected 13 cents.

Estee Lauder shares recently changed hands at $26.09, down 10 cents, or 0.4%. -By Kelly Nolan; Dow Jones Newswires; kelly.nolan@dowjones.com; 201-938-4049.

(Mike Barris contributed to this report).