Stitch Fix says it is reducing its workforce by around 15 per cent of salaried positions, as the online personalised styling service firm aims to return to profitability.
Decades-high inflation and the impact of the war in Ukraine have pressured Corporate America to consider laying off people or impose a freeze on hiring.
The layoff at Stitch Fix accounts for nearly 4 per cent of the roles, or around 330 positions, with most of them in its non-technology corporate and styling leadership roles, CEO Elizabeth Spaulding said.
“(The decision) was one we needed to make to position ourselves for profitable growth … There will be tough choices along the way, and this is one of those,” Spaulding wrote in a message to Stitch Fix employees.
Stitch Fix expects to save $40 million to $60 million in costs in fiscal 2023 from the job cuts and other changes while incurring charges of around $15 million to $20 million in the fourth quarter.
Shares, which closed more than 10 per cent lower on Thursday, were down nearly 6 per cent in extended trading after Stitch Fix reported revenue for the third quarter below expectations.
Stitch Fix also forecast net revenue between US$485 million and $495 million for the fourth quarter, compared with estimates of $495.1 million, according to Refinitiv data.
- Reporting by Praveen Paramasivam in Bengaluru; Editing by Krishna Chandra Eluri, of Reuters.
