Stitch Fix Inc., SFIX 2.16% a personal-shopping service and clothing retailer, notified its roughly 1,400 California-based stylists Monday, or about 18% of its total staff, that they will be losing their jobs.
Most of the layoffs will take place in September and those affected will have the opportunity to relocate and stay with the San Francisco-based company. The online retailer said it will be hiring about 2,000 stylists in lower-cost locations like Dallas, Pittsburgh, Cleveland, Minneapolis and Austin, Texas, beginning this summer, and going through 2021.
“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,” Stitch Fix founder and Chief Executive Katrina Lake said in a statement. The company will be providing severance payments and bonuses, as well as extended health-care coverage, she said.
The company has approximately 8,000 employees, 5,100 of which are stylists. The stylists help select items that are shipped to customers each month as part of the subscription service. Customers are charged for the items they keep.
Stitch Fix in March announced the temporary closure of two distribution centers due to public-health orders responding to the novel coronavirus outbreak. Like many retailers in April it withdrew its financial forecasts for the fiscal year. The company is slated to report quarterly results next Monday, June 8.
Write to Charity L. Scott at Charity.Scott@wsj.com
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