Online personal shopper and clothing retailer Stitch Fix is fashioning a plan to add jobs in lower-cost places like Austin and Dallas while laying off more than 1,400 employees in pricey California.
San Francisco-based Stitch Fix is laying off 1,424 stylists in Northern and Southern California and hiring about 2,000 stylists in the less expensive cities of Austin, Dallas, Cleveland, Minneapolis, and Pittsburgh. The company’s part-time stylists pick out clothing for customers who then can buy or reject those items through the Stitch Fix subscription service.
In a company memo, Stitch Fix says that “it does not make financial sense to maintain a large styling team in California.”
The Stitch Fix hiring surge comes at a critical time, as millions of Americans have been left jobless by pandemic shutdowns and the U.S. economy has almost certainly plunged into a recession. At the same time, employers are cutting back on hiring as a money-saving measure.
Austin is among Stitch Fix’s “stylist hubs.” The company is starting the hiring wave this summer; it’ll extend into 2021.
Stitch Fix employs about 5,100 stylists. The layoffs, which will take place through the end of September, represent about 18 percent of the company’s workforce. Laid-off stylists will be given the chance to keep their jobs by relocating to U.S. locations outside California.
“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,” Katrina Lake, founder and CEO of Stitch Fix, says in a statement.
Stitch Fix says the California job cuts aren’t related to the coronavirus pandemic, but rather are part of the company’s review of expenses.
The company’s layoffs and hiring shift were first reported by the Wall Street Journal.