The San Francisco-based company employs 8,000 people, including 5,100 stylists who select garments that are shipped to customers each month via subscriptions. Customers can wear and return items or pay to keep the outfits they like.
The Wall Street Journal first reported the news. In an email to The Chronicle, Stitch Fix said it would provide a minimum of two weeks’ wages in severance pay to terminated employees, continue to cover health care and provide recruiting resources. He said that all of the affected designers are offered the opportunity to move. The affected employees are all remote workers throughout California, according to a state filing that did not specify the exact locations.
The redundancies will take place between June and September. The company said it is investing in lower cost centers outside of California – Austin, Dallas, Pittsburgh, Cleveland and Minneapolis – where it plans to hire about 2,000 stylists until 2021.
“We made the very difficult decision to reduce the number of stylists in our styling team in California, as we invest in our other styling centers in the United States and in innovations that will help us evolve our experience at home. ‘to come up. All of our California-based stylists will be offered the opportunity to move to new roles in other states, “said CEO Katrina Lake in a statement. “Any decision that has an impact on our workers and our talents is incredibly difficult, but we think it’s the right thing to do for our business.”
The move is another example of companies relocating outside of California and investing elsewhere, such as Charles Schwab, which merges with TD Ameritrade, and which relocates to headquarters in Texas. Bechtel and McKesson have also moved the headquarters to San Francisco in recent years, while tech companies like Uber and Google have grown in Texas and Chicago.
Stitch Fix said the layoffs were a strategic business decision and were not related to the coronavirus pandemic. However, the pandemic has devastated retail spending with millions of unemployed people. In March, Stitch Fix temporarily closed two of its distribution centers in south San Francisco and Bethlehem, Pennsylvania, to comply with local public health ordinances.
Stitch Fix’s third quarter earnings conference call will take place on Monday.
Shwanika Narayan is a writer at the San Francisco Chronicle. Email: [email protected] Twitter: @shwanika