Stitch Fix to cut 1,400 jobs in California, invest in other U.S. states

[June 02, 2020]  By Rebekah Mathew and Sanjana Shivdas

(Reuters) - Stitch Fix Inc said on Monday it plans to cut up to 1,400 jobs in California and invest in other U.S. states where the apparel seller would offer new roles to all those affected.

The San Francisco-based company said it was getting increasingly expensive to operate in California and plans to hire about 2,000 stylists in other lower-cost locations such as Dallas, Minneapolis, Pittsburgh, Cleveland and Austin, Texas.

The strategic move is not related to the COVID-19 pandemic, the company added.

Stitch Fix, which uses algorithms and experts to ship personalized clothing selections to clients, currently employs about 5,100 stylists.

Chief Executive Officer Katrina Lake said in a statement that the decision was "the right thing to do" for the business.

"All of our California-based stylists will be offered the opportunity to relocate to the new roles in other states," Lake said, adding that the apparel seller would provide financial help to the stylists, including severance payments, bonuses, and extended healthcare.

Most of the layoffs will happen towards the end of September, Stitch Fix said.

The Wall Street Journal first reported news of the job cuts earlier in the day.

(Reporting by Sanjana Shivdas and Rebekah Mathew, additional reporting Sabahatjahan Contractor in Bengaluru, Editing by Sherry Jacob-Phillips)

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