Stitch Fix, a San Francisco-based personal-styling startup, said this week that it will cut 1,400 of its employees located in California and move these jobs to less expensive labor markets in the middle of the country.
The cuts represent about 18% of the company's total staff, according to the Wall Street Journal. Stitch Fix has approximately 8,000 employees, 5,100 of which are stylists. Most of the layoffs will take place at the end of the summer, but affected employees will be given a chance to relocate to keep their jobs.
"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," Stitch Fix Founder and CEO Katrina Lake said in a statement to the Wall Street Journal.
The San Francisco Business Times said Stitch Fix indicated that the layoffs were a strategic business decision and in no way related to Covid-19, though the business had been impacted by the pandemic. Stitch Fix closed distribution centers in South San Francisco and Bethlehem, Pennsylvania, in March at the request of public health officials in those areas.
The company plans to hire a total of 2,000 stylists in the following cities: Minneapolis, Dallas, Austin Pittsburgh and Cleveland. The hiring will begin in the coming months and continue through 2021.
Stitch Fix already has a presence in many of the cities where it plans to expand. In the Twin Cities, the company currently has around 300 employees, according to LinkedIn.
"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," Lake said in a statement.
