Stitch Fix Shares Fall After Laying off 15% of Workers

UKRAINE - 2021/09/24: In this photo illustration a Stitch Fix, Inc. logo is seen on a smartphone. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)

Stitch Fix (NASDAQ: SFIX) has laid off 15% of salaried workers, specifically within corporate and styling leadership positions, according to an internal memo. The company’s shares fell 9% Thursday amid the news.

The layoff will affect approximately 330 roles, 4% of its workforce. The job cuts come amid rising costs on everything from its supply chain and marketing to labor. Furthermore, the company is currently struggling to bring in new users.

“We’ve taken a renewed look at our business and what is required to build our future,” Stitch Fix CEO Elizabeth Spaulding said in the memo. “While this was an incredibly difficult decision, it was one needed to make to position ourselves for profitable growth.”

The company previously cut its revenue guidance for the year and reduced its earnings forecast. Additionally, Spaulding stated that the company’s active client count was not where she expected it to be. Stitch Fix will be releasing its fiscal second-quarter results after the market close.

The online personal styling service stock has plummeted about 55%  throughout the year, and its market cap has fallen under USD1 Billion.