Stitch Fix Inc. said on Thursday it is reducing its workforce by around 15 percent 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 put a freeze on hiring.
The layoff at Stitch Fix accounts for nearly 4 percent of the roles, or around 330 positions in total, with most of them in its non-technology corporate and styling leadership roles, Chief Executive Officer 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 percent lower on Thursday, were down nearly 6 percent in extended trading after Stitch Fix reported revenue for the third quarter below expectations.
Stitch Fix also forecast net revenue between $485 million and $495 million for the fourth quarter, compared with estimates of $495.1 million, according to Refinitiv data.
By Praveen Paramasivam; Editing by Krishna Chandra Eluri
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