Stitch Fix is reportedly laying off 1,400 stylists, or about 18% of its total staff, according to The Wall Street Journal. The retailer will provide severance payments and bonuses as well as extended healthcare coverage for affected employees.
Most of the layoffs will take place in September, and those affected will be able to stay with the company if they relocate to a less expensive area. This ties into another aspect of Stitch Fix’s plan: the company will hire about 2,000 stylists in lower-cost cities including Dallas, Pittsburgh, Cleveland, Minneapolis and Austin, Texas, beginning in the summer and continuing through 2021.
“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 U.S., and the innovations that will help evolve our experience in the future,” said Katrina Lake, CEO and Founder of Stitch Fix in a statement.
Stitch Fix is feeling the impact of the COVID-19 pandemic even as an e-Commerce retailer: the company had to close two distribution centers in March to comply with health orders. Additionally, the uncertainty of the situation led the retailer to withdraw its Q3 and fiscal 2020 guidance, a step that many other companies in the retail industry have taken.