Lightroom can be set up to create a cleaner folder structure during import, which is the easiest solution going forward. One common setup is nested date folders such as Year > Month > Day.

For your descriptive folder names, a better long-term approach is often to keep the folders date-based and store things like occasion, city, or event in keywords instead. That makes searching much easier—for example, searching for “Birthday” across multiple years.

Based on the answers provided, Lightroom’s folder-organization automation is primarily an import feature, not a bulk “rebuild my existing folders” tool. If you want existing images reorganized automatically, one possible route mentioned is importing from an existing catalog into a new catalog with the desired folder structure.

So:

• For future imports: use Lightroom’s import folder options to create year-based or nested date folders.
• For existing files: there doesn’t appear to be a simple automatic one-click reorganization method described here; a catalog migration may help, otherwise manual reorganization may still be needed.