Stitch Fix (NASDAQ:SFIX) said Thursday that it is laying off 15% of salaried positions within its workforce, mostly in corporate roles and styling leadership positions, in a bid to trim expenses amid red hot inflation and waning consumer demand for certain items.
Stitch Fix said it expects to save between $40 million to $60 million in fiscal year 2023 with the job cuts. It also anticipates incurring restructuring and other one-time charges of roughly $15 million to $20 million, which will be recognized in its upcoming fourth quarter.
The company also offered up a disappointing forecast for its fiscal fourth quarter, calling for revenue to be between $485 million and $495 million, which would represent as much as a 15% drop from prior-year levels.
Stitch Fix shares tumbled nearly 11% Thursday, closing the day at $7.78. They declined another $1.02, or 13.1% to $6.76. The stock traded as high as $68.15 a year ago.
The job cuts come as the online styling service has been grappling with higher expenses on everything from its supply chain to marketing to labour, and it has also been struggling to onboard new users.
Stitch Fix CEO Elizabeth Spaulding said in a memo to employees, “While this was an incredibly difficult decision, it was one needed to make to position ourselves for profitable growth.”
The roughly 330 people were notified of the cuts on Thursday morning, the memo said. That number represents about 4% of the company’s overall workforce.
