Dive Brief:
- American Apparel will lay off 180 employees, the New York Times reported Wednesday.
- The affected employees are mainly from the manufacturing section of the retailer's operations, reports the Times.
- CEO Paula Schneider said in an interview with the Times that unpaid furloughs previously imposed on some American Apparel employees will end following the layoffs.
Dive Insight:
While these layoffs affect just 1.8% of American Apparel's overall workforce, they provide a glimpse at new CEO Paula Schneider's vision for the company.
Schneider hopes to slim down the company's inventory by eliminating underperforming styles, which will most likely cut its production needs in the future. With over 4,000 styles currently offered by the company, lowering production costs might help the company invest more money into design and stores — two areas that Schneider says the company is focusing on.
While only in the top spot since December, Schneider seems to be making drastic moves to help the company pivot from its original image and usher in a new era of streamlined business and less overtly sexual merchandising.
“This is a very sad day,” Schneider wrote in a memo Wednesday. “We’ve made these business decisions to preserve over 98 percent of the workforce. It is very challenging to go down this route, but we have to conduct business differently in order to thrive. Ultimately, our goal is to get as many employees as possible back to work full time.”