Stitch Fix cuts jobs, revenue forecasts fail sends stocks lower

Stitch Fix Inc. does the cutting About 15% of jobs are salaried as part of a plan to return to profitability.

shares Online personal design services company 16% after hours.

Revenue in the quarter ending in April was down 8% from a year earlier.

company Expected net revenue Between $485 million and $495 million for the fourth quarter, compared with estimates of $495.1 million, according to Refinitiv data.

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layoffs calculation for approximately 4% of the company’s total workforce, or about 330 jobs in total.

The majority of jobs are in non-tech companies and design roles, according to CEO Elizabeth Spaulding.

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“[The decision] Spaulding wrote in a letter to Stitch Fix employees, “We had to do to position ourselves for profitable growth…There will be tough choices along the way, and this is one of those choices.”

Job cuts and other changes are expected to save $40 million to $60 million in costs in fiscal 2023. The company will also incur $15-20 million in fees in the fourth quarter.

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The company lost $78 million in the third quarter of the fiscal year. On a stock basis, the San Francisco-based company said it had a loss of 72 cents, which is more than the expected loss of 57 cents a share.

Reuters contributed to this report.