Lockdown orders and social distancing have caused many to pause nonessential shopping, hitting retailers with declining revenue and forcing to some to lay off staff or even close their doors.
The latest to be hit with layoffs is San Francisco-based Stitch Fix, the personal styling platform. And while the company is laying off 1,400 of its stylists, the company plans to eventually bring on even more with many coming to Texas -- in Dallas and Austin.
“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,” said CEO Katrina Lake in a prepared statement.
The Wall Street Journal broke the news of the layoffs, which make up about 18% of Stitch Fix’s 8,000-member team – 5,000 of which are stylists. The company plans to continue the layoffs through September. According to the San Francisco Chronicle, all of the layoffs are of remote workers in California.
Stylists select clothes and accessories for Stitch Fix users, who then choose which items to keep or return. The company operates on a subscription model.
The pandemic has hit the company hard, causing it to temporarily close two of its distribution centers – one in California and one in Pennsylvania – in order to comply with Covid-19 health guidelines.
However, the layoffs in California mean some new openings in North Texas and other places. Stitch Fix is planning to hire 2,000 stylists in places like Dallas, Austin, Cleveland and Minneapolis, due to the difference in cost of living wages. The company said it will be offering its laid off stylists the option to relocate. If they choose not to, they will be given a two-week severance, health care package and help finding a new job.
Stitch Fix was launched in 2011, eventually going public in 2017 with a valuation of $1.4 billion. At the time it went public, it had 200-plus employees in its Austin office.
And, last year, it scooped up the IP of New York-based startup Finery, which has one of its founders and several of its investors based here in Austin. Finery was founded in 2017 by Austin-based actor and model Brooklyn Decker and CEO Whitney Casey, a former CNN anchor.
“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,” Lake said.
Austin Inno's Brent Wistrom contributed to this article.
