Stitch Fix is Letting Go of 1,400 Employees in This State

According to Wall Street Journal report, online personal styling service Stitch Fix announced on Monday that it is laying off 1,400 employees in California, and plans to hire in lower-cost U.S. cities.

Stitch Fix said it would be letting go of these stylists between now and the end of September and that it plans to hire 2,000 stylists in other U.S. locations like Dallas, Minneapolis, and Austin, Texas, between the summer of 2020 and into next year.

Laying off stylists based in California will cut the company’s overall headcount of 8,000 by 18%.

Employees who do not want to relocate will receive a minimum two-week severance payment, continued healthcare, help getting another job and possible bonuses for staying on until the layoffs are complete, a Stitch Fix spokesperson said.

The company’s founder and CEO Katrina Lake commented, “We have taken the very difficult decision to reduce the number of Stylists in our styling team in California, as we invest in our other styling hubs across the US, and the innovations that will help evolve our experience in the future. All of our California-based stylists will be offered the opportunity to relocate to the new roles in other states.”

“Any decision that impacts our hardworking and talented people is incredibly tough, but we believe this is the right thing to do for our business. We are committed to supporting our people through this by providing as much financial stability as possible, including severance payments that increase with tenure, bonuses for Stylists staying with us during the transition period, extended healthcare and recruitment resources.”

It was in March that the company had to close two of its distribution centers, one in California and another in Pennsylvania, temporarily to comply with Covid-19 health orders. Stitch Fix withdrew guidance for the third quarter and fiscal year 2020 because of uncertainty amid the pandemic.

Disclaimer: We have no position in Stitch Fix Inc. (NASDAQ: SFIX) and have not been compensated for this article.