Online Clothing Service Stitch Fix Will Lay Off 1,400 California Stylists

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Online clothing service Stitch Fix  (SFIX) - Get Report, known for picking out stylish clothing and accessories for customers, is laying off around 1,400 California-based stylists.

The layoff amounts to about 18% of its total staff.

However, Stitch Fix is planning on hiring stylists in other areas like Austin, Dallas, Pittsburgh, Cleveland, and Minneapolis, which offer lower costs of living. Laid off stylists are being given the option to relocate which would allow them to continue working.

The coronavirus pandemic has impacted the company, as it was forced to close two distribution centers in March. It withdrew fiscal guidance for 2020, citing uncertainty caused by the pandemic.

Most of the layoffs will take place in September. 

Stitch Fix Lead

Here is CEO Katrina Lake's full statement:

“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. All of our California-based stylists will be offered the opportunity to relocate to the new roles in other states.

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, including severance payments that increase with tenure, bonuses for Stylists staying with us during the transition period, extended healthcare and recruitment resources."

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