Dive Brief:
- San Francisco-based Stitch Fix told employees Thursday it will be cutting salaried positions by about 20% or around 330 employees.
- In the company-wide memo, founder Katrina Lake also announced that CEO Elizabeth Spaudling, who took the company’s helm in August 2021, will be stepping down. Lake is set to move back into the CEO role as an interim position, CNBC reported.
- The struggling online personal styling service is the latest tech company to announce layoffs, following on the heels of news this week of cuts at Amazon and business software provider Salesforce.
Dive Insight:
As an increasing number of economists have forecast a downturn, finance chiefs are wrestling with if or when to make the hard call to cut jobs.
Most recently, this week Amazon CEO Andy Jassy announced that layoffs will affect more than 18,000 workers, according to the Wall Street Journal. And on Wednesday Salesforce announced that it too, had plans to cut 10% of its workforce and trim real estate.
Stitch Fix’s Lake acknowledged the job losses in a memo to employees.
“We will be losing many talented team members from across the company and I am truly sorry. Everyone will get an email soon letting you know what this means for you,” wrote Lake in the memo.
Despite former CEO Spaulding’s focus on growth, the company’s recent fiscal year results revealed its struggles. In its most recent fiscal year, the company reported a net loss that widened to $207.1 million from $8.9 million, according to reporting by CFO Dive sister publication Retail Dive.
Stitch Fix’s business is all online, a strength in recent years as other businesses faced challenges from COVID-19 restrictions. However, the pandemic-era boom has waned as the online retailer’s market cap has fallen below $1 billion, as the stock has declined about 58% this year.
Lake, now stepping in as interim CEO following Spaulding’s departure, said in the memo that “despite the challenging moment we are in right now, the board and I still deeply believe in the Stitch Fix business, mission and vision.”
The memo also disclosed that employees affected by the cuts will receive notice via email and are set to receive at least 12 weeks of pay, healthcare and mental wellness support through April 2023, as well as career support.
