Stitch Fix will layoff 15 percent of the salaried roles as the personal shopping and styling business struggles with slowing revenues and growing losses.
The changes would affect around 330 employees at the San Francisco-based company, as well as approximately 4 percent of its total staff.
The majority of the cutbacks are in nontechnology corporate positions and styling leadership roles.
CEO Elizabeth Spaulding said: “We are in the midst of a transformation and we know not every day or every moment will be easy. There will be tough choices along the way, and this is one of those.”
The company has begun began notifying employees who are affected by the layoffs.
The reductions are estimated to save between $40 and $60 million in the next fiscal year, which begins in August.
In a securities filing on Thursday, June 9, Stitch Fix stated that it will assess additional operational expenditures, including its real estate footprint.
The downsizing came after the company’s sales decreased 8% year on year in the April-ended quarter, and its losses more than quadrupled.
Shares sank more than 10 percent in Thursday trade and an additional 16 percent after hours. The shares concluded the day down 93 percent from their peak in January, 2021.
Stitch Fix is the latest e-commerce firm to face changes in consumer preferences caused by factors ranging from chronic inflation to trends toward spending on services rather than products.
WHAT IS STITCH FIX?
Stitch Fix provides personalized shipments of apparel, shoes, and accessories for men, women, and children in the form of a subscription.
Where it is headquartered? The company is headquartered in San Francisco, California.
How many staff does it have? It currently has around 11,260 employees.
What is its annual revenue? The annual revenue is around $2 Billion.
Source: The Wall Street Journal