Stitch Fix Lays Off 1,400 California Workers, Plans to Move to Lower-Cost U.S. Cities

Online retailer and styling service Stitch Fix said Monday that it plans to lay off 1,400 stylists based in California between now and the end of September, reports CNBC. The company plans to hire 2,000 stylists in other U.S. locations like Dallas, Minneapolis, and Austin, Texas, between the summer of 2020 and into next year. Laying off stylists based in California will cut Stitch Fix's overall headcount of 8,000 by 18 percent. Laid off stylists will have the chance to relocate and continue working, and employees who do not want to relocate will receive a minimum two-week severance payment, continued healthcare, help getting another job, and possible bonuses for staying on until the layoffs are complete, a Stitch Fix spokesperson confirmed.

Total Retail's Take: Although the timeline is long, Stitch Fix's plan to hire stylists in other locations following cuts in California indicate that the company isn't faltering, but rather re-strategizing. The company's founder and CEO Katrina Lake said in a 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 U.S., and the innovations that will help evolve our experience in the future." The announcement comes during the COVID-19 pandemic, when many retail employees have already been furloughed or let go. However, Stitch Fix is taking action to try to lessen the impact of its layoffs on its employees through severances and extended healthcare. It will be intriguing to see what cities Stitch Fix ultimately chooses for new hiring locations, and if it reaches its goal of 2,000 new stylists within the next year.