Stitch Fix, facing economic turmoil, announced a one-two punch on Thursday: CEO Elizabeth Spaulding is stepping down and the company planned to lay off 20% of its salaried staff.
The online subscription clothing retailer also said it was closing some operations, including its Salt Lake City distribution center.
“We will lose many talented team members across the company and I am so sorry,” wrote Stitch Fix (SFIX) founder and former CEO Katrina Lake in a blog post.
The company named Lake as its interim CEO after announcing Spaulding’s departure on Thursday. Spaulding joined the company in 2019 as President and became CEO in 2021.
Stitch Fix shares rose 6% on the news.
Lake said affected employees will receive health coverage through April and at least 12 weeks of pay, which increases with term.
“To those impacted: You took a chance on Stitch Fix, you trusted us with your time and investment of yourself, and I am truly sorry that we are parting ways with you today,” wrote Lake. “Despite the challenging time we are in now, the board and I still believe deeply in the business, mission and vision of Stitch Fix.”
In June 2022, Stitch Fix laid off 15% of its salaried staff – around 330 employees – amid slowing e-commerce growth in the retail sector.
The company launched in 2011 and went public in 2017, and it was booming just a year ago. But Stitch Fix has struggled as more shoppers return to in-person shopping and reduce their online spending. The company is also facing higher costs.
Stitch Fix shares have lost more than half their value this year and are now worth less than $1 billion.
Layoffs are accelerating as industries brace for a deeper economic downturn in 2023.
Amazon announced on Wednesday that it was cutting 18,000 jobs, Salesforce said this week it would cut about 10% of its staff, and Helen of Troy, which owns Vicks, OXO and Osprey, among other consumer goods and beauty, is laying off 10% of its staff, in the face of weak demand and economic uncertainty.
Source: CNN Brasil

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