Stitch Fix Lays Off 15% of its Salaried Employees Causing Shares to Sink

Shares of Stitch Fix were heading lower after Wall Street learned that the company had laid off 15% of its salaried employees.

The positions are mostly in corporate roles and styling leadership positions, according to an internal memo seen by CNBC.

“We’ve taken a renewed look at our business and what is required to build our future,” Stitch Fix CEO Elizabeth Spaulding said in the memo.

Shares of the company fell about 8% Thursday, to trade around $7.97.
The online styling service has been grappling with higher expenses on everything from its supply chain to marketing to labor.

“While this was an incredibly difficult decision, it was one needed to make to position ourselves for profitable growth,” Spaulding added.

The roughly 330 people were notified of the cuts on Thursday morning, the memo said. That number represents about 4% of the company’s overall workforce.

The layoffs come only a few months after Stitch Fix cut its revenue guidance for the year and withdrew its earnings forecast. At the time Spaulding said, “We are confident in our long-term strategy, and we’re seeing clear signals that we are taking the right steps for the future of the business,” she told analysts.

Spaulding also said the company’s active client count was not where she wanted it to be. As of Jan. 29, Stitch Fix counted roughly 4 million active customers.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.