Stitch Fix to lay off about 1400 employees in California

Lawrence Kim
June 6, 2020

Stitch Fix, which uses algorithms and experts to ship personalized clothing selections to clients, now employs about 5,100 stylists.

Stitch Fix uses a team of stylists to select clothing and accessories for customers, shipping them as a monthly subscription service, where they can be worn, returned, or kept. Customers can wear and return items, or pay to keep the ones they like the most.

The Wall Street Journal first reported news of the job cuts earlier in the day.

As the San Francisco Chronicle reports, the affected employees are all remote workers in the state of California.

The layoffs will take place between June and September.

Stitch Fix, founded by CEO Katrina Lake, has evolved from a fledgling startup to a retail disruptor success story.

Stitch Fix said Monday that it plans to eventually hire 2,000 stylists in USA locations which have a lower cost of living than cities in California - places like Austin, Texas, or Minneapolis. "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". Bechtel and McKesson also moved headquarters out of San Francisco in recent years, while tech companies like Uber and Google have expanded in Texas and Chicago. A representative said changes to its workforce are not due to COVID-19.

The pandemic-driven economic fallout also continues to result in layoffs across the USA, with an estimated 40 million Americans filing for unemployment in the past 10 weeks. Stitch Fix temporarily closed a South San Francisco distribution centre in March in compliance with local public health orders.

Stitch Fix's third-quarter earnings call will be held on Monday.

Other reports by Click Lancashire

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