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Levi Strauss to Cut 800 Jobs in Cost-Saving Initiative

Levi Strauss & Co has outlined a plan to eliminate 800 jobs in a global productivity initiative that is expected to generate annual cost savings between $175 to $200 million once completed.

The clothing retailer announced the move Wednesday saying the new initiative will be executed in phases over the next 12 to 18 months.

Levi’s said it will eliminate the 800 positions, which amounts to 20 percent of its non-retail and non-manufacturing staff, in the first phase of the program and it expects to save $75 to $100 million before restructuring and related charges as a result. The company will reduce layers in management, increase spans of control, eliminate redundant roles and regroup country clusters among other structural changes.

The retailer also intends to revamp key processes to allow for additional cost savings and improve agility. Levi’s will focus on: streamlining its product development, planning and go-to-market strategies; increase efficiencies in the company’s supply chain and distribution network; incorporating lower cost service-delivery models; and pursuing more disciplined procurement practices.

Chip Bergh, Levi’s president and chief executive officer, said, “Today’s announcement reinforces our ongoing commitment to improving the structural economics of the business and further strengthening the financial health of the company,” He added, “These changes will make us more competitive–both in our cost structure and in the marketplace–improving our agility and enabling us to focus on innovation, retail productivity, omni- channel capabilities and enhanced consumer experience in stores.”