Levi Strauss cuts 700 jobs over coronavirus revenue losses
Coronavirus caused 62% drop in second-quarter sales
Levi Strauss will cut about 700 jobs after its sales were dropped 62 percent in the second quarter, the company announced Tuesday.
The jeans maker said it lost that revenue because stores across the country were closed for about ten weeks because of the coronavirus pandemic, according to a company announcement.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LEVI | LEVI STRAUSS & CO. | 16.32 | +0.35 | +2.19% |
Levi’s online retail grew 25 percent for the quarter, the announcement said, but that wasn’t enough to recover losses from brick-and-mortar stores.
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As a result of those losses, Levi’s President and CEO Chip Bergh said the company would be cutting 15 percent of its “non-retail, non-manufacturing workforce,” which comes out to 700 jobs.
He said that those job cuts are expected to create $100 million in annual savings.
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A Levi's store in Hong Kong is pictured in 2012. (iStock)
“The pandemic is accelerating retail landscape shifts and consumer behavior in ways that play to the strength of the Levi’s brand,” Bergh said in a statement. “And we are doubling down on our digital transformation, incorporating the power of AI and data science, and leveraging our iconic brands to have an even stronger focus on Gen Z and sustainability.”
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Levi Strauss saw a net loss of $364 million for the quarter, according to Levi's.
About 90 percent of Levi’s stores have reopened around the world and “performance has trended better than the company’s expectations," according to Levi's.
“Although trends appear to be improving sequentially, the ultimate health and economic impact of the COVID-19 pandemic remains highly uncertain,” Levi's announcement said. “The company expects that its business and results of operations, including net revenues, earnings and cash flows, will continue to be significantly adversely impacted for at least the balance of 2020, and there remains the possibility of additional COVID-19 related inventory and other charges.”
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