Levi Strauss announced on Thursday that it will lay off at least 10% of its global corporate workforce as part of a restructuring initiative, anticipating weaker sales for the year ahead.
The layoffs are expected to occur in the first half of the year and could impact as much as 15% of corporate employees, according to Levi’s.
As of November, the company employed over 19,000 people, although it remains unclear how many of those are based in corporate offices.
The cuts will result in restructuring charges ranging from $110 million to $120 million in the first quarter. This decision comes amid a wave of layoffs at the beginning of the year across the retail sector and various public companies.
Notable retailers such as Macy’s and Wayfair have also announced job reductions this month, as both established and emerging retailers seek to stimulate sales and improve profitability.
The announcement coincided with the release of Levi’s fiscal fourth-quarter earnings, where the company projected a weaker-than-expected fiscal year ahead.
This cost-cutting effort arrives as Levi’s President Michelle Gass is set to take over as CEO from Chip Bergh on Monday.
The company indicated that it expects revenue growth of 1% to 3% for the full fiscal year, which is lower than the anticipated 4.7%.
Levi’s also projected earnings of $1.15 to $1.25 per share for the year, falling short of analyst expectations of $1.33 per share.
For the three-month period ending on November 26, net income was reported at $126.8 million, or 32 cents per share, down from $150.6 million, or 38 cents per share, in the same period a year earlier. Revenue increased by 3% to $1.64 billion.
Following the announcement, the company’s shares rose by approximately 4% in trading on Friday.
During the quarter, inventories decreased by 9% compared to the previous year, and wholesale revenue experienced a slight decline of 2%.
In specific segments, Beyond Yoga revenue saw a 14% increase as the denim retailer aims to capture a larger share of the athleisure market. Earlier this month, the company appointed former Athleta CEO Nancy Green as the new chief executive of that brand.
However, the company’s other brands segment reported an 11% drop in net revenue.
Additionally, Levi’s has reportedly renewed its naming rights agreement for the San Francisco 49ers stadium for a duration of 10 years at a cost of $170 million.
