High inflation for decades and the impact of the war in Ukraine have caused American companies to consider laying off people or freezing hiring.
The layoff at Stitch Fix represents nearly 4% of positions, or about 330 positions in total, most of them in non-tech business and style leadership roles, said chief executive Elizabeth Spaulding.
“(The decision) was one we had to make to position ourselves for profitable growth…There will be tough choices along the way, and this is one of them,” Spaulding wrote in a message to employees. by Stitch Fix.
Stitch Fix expects to save $40-60 million in costs in fiscal 2023 from job cuts and other changes, while incurring costs of approximately $15-20 million in fourth trimester.
Shares, which closed more than 10% lower on Thursday, fell nearly 6% in extended trading after Stitch Fix reported third-quarter earnings that fell short of expectations.
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Stitch Fix also forecast net revenue between $485 million and $495 million for the fourth quarter, versus estimates of $495.1 million, according to Refinitiv data.