Stitch Fix to cut 20% of salaried jobs, CEO stepping down
Stitch Fix CEO Elizabeth Spaulding only spent 17 months on the job
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Stitch Fix announced on Thursday that it will cut 20% of its salaried workforce and that CEO Elizabeth Spaulding will step down from her post.
Spaulding, who spent only 17 months on the job, said in a statement Thursday that the online personal styling service is working to create "a leaner, more nimble organization to set the company up for a return to profitability."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SFIX | STITCH FIX INC. | 4.66 | +0.02 | +0.43% |
As part of this "ambitious transformation," the board and Spaulding jointly decided that she will step down. Stitch Fix founder and former CEO Katrina Lake will serve in an interim capacity until a successor is appointed.
"Despite the challenging moment we are in right now, the board and I still deeply believe in the Stitch Fix business, mission and vision," Lake said, adding that there is "a great future available for this company and we are committed to getting the company on a path to achieve it."
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Elizabeth Spaulding, chief executive officer of Stitch Fix, participates in a panel discussion during the Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, May 2, 2022. ( Lauren Justice/Bloomberg via Getty Images / Getty Images)
Lake also apologized to affected employees for the job cuts occurring nationwide including at the soon-to-be shuttered Salt Lake City distribution center.
During this period, Lake said the company's priority "is to ensure that those leaving Stitch Fix are supported in their transition."
Employees will get at least 12 weeks of pay, which increases with tenure, health care support through April 2023 and mental wellness support up to the end of April 2023, Lake said.
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Additionally, "we will do everything possible to support those impacted to find new roles, including outplacement support and an opt-in alumni database where their profiles are accessible to potential employers," Lake added.
Stitch Fix joins a growing list of companies trying to become leaner and cut costs as concerns that the Federal Reserve will continue raising rates to tame inflation grow.