Apparel company Stitch Fix said it will lay off workers as its CEO Elizabeth Spaulding steps down.

Stitch Fix to Lay Off 20% of Employees as CEO Steps Down

time now for our stock of the day, we're taking a look at shares of stitch fix as the online personal styling service did announce a big round of job cuts along with the C suite shakeup. So the company saying earlier today that it's gonna lay off about 20% of its salaried workers. That accounts for more than 1000 jobs as the company had nearly 8000 total employees as of last year. Well, the ceo Elizabeth spaulding was also announcing that she'll be stepping down as the chief executive with the founder who you see on your screen there, Katrina Lake reentering the role at least temporarily. The company is also gonna close a distribution center in Salt Lake City and shares a stitch fix up close to 10% today as investors seem to like the cost cutting measure whether it will be enough to help turn the company around still up in the air though. I mean the stock is just $3.51. So stitch fix was growing rapidly before the pandemic. A super hot I. P. O. But once the global health crisis hit, the stock did start to tumble until people got sick of wearing sweatpants and wanted to dress up again in late 2020 and early 2021. Well, the company began to actually turn a quarterly profit causing the stock disorder record highs of around $97 a share in January of 2021 in anticipation of a full economic reopening, but we know how that went. I mean a lot of people still not in the office. So the good times didn't last stitch fix. Overestimated the market for its services botched the rollout of its direct to consumer platform freestyle. And by the time executives could catch their breath, they found themselves in an economic downturn, causing challenges like supply chain issues, inflation and changing consumer sentiment, which in turn brought lower sales and caused the company to burn through cash, turning back into unprofitable. Itty. So in the past two years has stopped down 95%. That's rough. Well, all of this causing some major conflict between the company and its investors. No surprise stitch fix, acknowledging that it downplayed the significance of its shift from a subscription based model to a retail model which allows customers to buy directly from the site instead of choosing from a curated monthly selection of clothes picked by a stylist stitch fix. Initially said that the retail model and the subscription model could work in tandem with each other and denied claims that the new model would cannibalize the existing one, but turns out that's exactly what happened when customers visited the site looking for the subscription service. The primary landing page feature the direct to buy model which ate into the part of the business that so many people invested in making shareholders pretty upset and leading to a class action lawsuit. So not just a down share price. So we'll see whether or not stitch fix can pull itself out of this rut Or whether or not the business is broken. I don't know, $3.50 apiece. We'll see what Katrina light can do.