UNITED STATES—Levi Strauss & Co. announced on Tuesday, July 7 that they would reduce their corporate workforce by eliminating 700 office jobs due to the company’s sharp drop in its second quarter earnings. However, the layoffs won’t affect workers at any of the clothing company’s stores or factories.
Most of the laid off employees will receive notice periods and be able to keep company issued technology. They will also receive transition assistance and retain access to basic healthcare.
Levi’s recent decline in revenue occurred after the COVID-19 pandemic forced the majority of the company’s stores, as well as department stores that sell Levi’s jeans, to close for the last few months. While their online sales have skyrocketed, that has not been enough to make up for the revenue that the company is losing due to the lack of in-person shopping. According to Chip Bergh, President and CEO of Levi Straus, the company’s revenue declined 62% overall in Q2, and their quarterly adjusted EBIT loss of $206 million marked the first time in over 16 years that this company has seen negative EBIT.
Levi Strauss & Co. expect the layoffs to save the company about $100 million a year to make up for lost revenue.
Despite Levi the fact that stores have now reopened in 90% of the world, revenue continues to lag with company officials projecting that it will take some time before pre-COVID-19 levels of income return.
