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Job Insecurity: Layoffs Take Toll on Retail

Fear of a pending recession, increasing labor costs and a rocky macroeconomic climate made for the perfect storm, resulting in layoffs in all industries, from Elon Musk slashing half of Twitter’s workforce to Facebook parent Meta jettisoning 13 percent of its staff. Amazon made its biggest job cut in history with 10,000 layoffs in November.

And retail was no exception.

Here are the retail and tech companies that cut back on their staff in 2022.

Allbirds

In August, Allbirds cut 8 percent of its workforce, amounting to approximately two dozen people left without a job. The Bay Area B Corp. terminated 23 global employees after evaluating options to “streamline workflows, reduce duplicative efforts, and put past learnings and operational insights into practice,” a spokesperson for the company previously told Sourcing Journal.

Amazon

In September, Amazon laid off 353 warehouse workers across two warehouse facilities in Maryland in an attempt to move away from labor “overcapacity.” The layoffs followed a quarter of cuts across the company, as Amazon reported a 99,000 reduction in staff between the first and second quarters of this year.

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Bed Bath & Beyond

As a part of its restructuring, Bed Bath & Beyond closed about 150 stores and slashed 20 percent of its corporate and supply chain jobs late this summer. “The decision to close stores and reduce headcount is a difficult one, but these steps reflect changes in strategy and will allow us to focus our resources on the areas of the business that are of the highest return as we drive toward sustainable long-term profit growth,” CFO Gustavo Arnal, who later took his own life, said.

Bolt Financial 

Payments company Bolt Financial laid off approximately one-third of its workforce, roughly 250 employees, in a mass email by CEO Maju Kuruvilla sent in June. He pointed to the current market conditions plaguing the tech sector. “In an effort to ensure Bolt owns its own destiny, the leadership team and I have made the decision to secure our financial position, extend our runway and reach profitability with the money we have already raised,” Kuruvilla said. “Unfortunately, this includes reducing the size of our workforce and parting ways with some incredibly talented people on our team as of today.”

Gap Inc.

Following its split from Ye, the artist formerly known as Kayne West, Gap Inc. cut approximately 500 corporate jobs across its New York, San Francisco and Asia offices in September. The company also paused planned hiring for open positions, which CFO Katrina O’Connell announced during its second-quarter earnings call in late August.

H&M Group

Amid a tightening labor market, the H&M Group reduced its workforce by approximately 1,500 employees—roughly 1 percent of its total—and instituted a hiring freeze in late November. The Swedish fashion retailer estimated that the layoffs, a part of a larger global program, will provide annual savings of around 2 billion Swedish kronor (about $190 million), expected to become visible in the second half of 2023.

Klarna

Buy now, pay later leader Klarna slashed its headcount by 10 percent, eliminating approximately 700 employees, in May. Workers in Europe, where Klarna is based, were offered a severance package. The process looked different for affected employees outside of Europe based on location.

Nordstrom

Nordstrom laid off 222 workers at its Cedar Rapids, Iowa distribution center in October, accounting for roughly 20 percent of its facility employees. A spokesperson for the retailer previously told Sourcing Journal that it had “made the difficult decision to reduce our workforce at our Midwest fulfillment center in order to better align with the current needs of our business.”  

Project44

Supply chain tech company Project44 confirmed 63 cuts to its staff in July, equating to less than 5 percent of the company. Twenty-one of the positions cut were in talent acquisition, the company previously told Sourcing Journal. “While this was not an easy decision to make, restructuring our organization keeps us on a path of success, provides the opportunity to improve efficiency and collaboration and allows us to better address the evolving needs of our customers,” Project44 founder and CEO Jett McCandless said in a statement.

Reebok

Reebok laid off approximately 150 workers in several departments, with the majority in the company’s Boston headquarters in January. The “across the board” cuts took effect when Authentic Brands Group (ABG) closed on the $2.45 billion purchase from former parent Adidas in March.

Rent the Runway

The designer fashion rental service Rent the Runway cut its corporate workforce by approximately 24 percent in late September as it restructured its business. The company announced its restructuring plan to reduce $25 million to $27 million in annual operating costs, streamline the organizational structure and drive operational efficiencies. The job cuts also included canceling open roles and reorganizing certain functions to prioritize the customer experience and growth initiatives.

Shopify

Shopify’s e-commerce growth didn’t go exactly as planned. Founder and CEO Tobi Lüke of Shopify, which helps merchants set up their e-commerce businesses, informed 10 percent of the staff that they were laid off in a letter sent in July. Lütke said laid-off employees would receive a minimum of 16 weeks of severance and healthcare benefits.

Stitch Fix

The online data-driven personal styling service Stitch Fix cut approximately 15 percent of salaried positions, nearly 330 employees, after the company saw third-quarter revenue fall 8 percent year over year. The cuts represent roughly 4 percent of the total roles at the company.

StockX

Detroit streetwear and sneaker marketplace StockX laid off 8 percent of its headcount in June, following fears that inflation will prevent people from buying “nice-to-have” items like premium sneakers. The company previously said that it was adjusting its roughly 1,500-strong workforce in the face of “macroeconomic challenges” affecting “businesses of all shapes and sizes.”

ThredUp

Resale marketplace ThredUp laid off approximately 15 percent of its corporate workforce and closed one of its processing centers in Lebanon, Tenn., in August. The news came from CEO and co-founder James Reinhart during the company’s second-quarter earnings call. ThredUp said it’s focused on a new goal to break even on an adjusted EBITDA level by the latter half of 2023, with the job cuts and processing center closure being the first steps toward that aim.

VF Corp.

The parent company of Vans, Supreme and The North Face cut about 300 corporate jobs and another 300 open roles in late August. VF Corp. CEO Steve Rendle sent a letter to employees, according to Denver Business Journal, and stating that the cuts were intended to “align our people and capabilities with our highest strategic priorities.”

Wolverine Worldwide

Wolverine laid off an unspecified amount of employees in December with the expectation of saving $30 million in 2023 as a result. The Sperry parent also stated its plans to divest or license the Keds brand and Wolverine Leathers business as well, calling them “low-profit contributors” to its larger operation.