Levi Strauss & Co plans 10% workforce cut

Levi’s has approximately 20,000 workers worldwide, including around 5,000 corporate employees.

Jeans maker Levi Strauss & Co announced its decision to reduce 10 to 15 per cent of its global corporate jobs due to weaknesses in its wholesale business.

Levi’s, which has approximately 20,000 workers worldwide, including around 5,000 corporate employees, anticipates the layoffs to occur in the first half of 2024.

The company cited various factors for its subdued forecast, including unfavourable foreign currency exchange rates, the liquidation of its Russia business, and its intention to withdraw from the Denizen brand.

Levi’s emphasised that discontinuing the Denizen business would enable them to enhance their margins and concentrate on other categories such as athletic wear.

Michelle Gass, Chief Executive Officer, mentioned that while the US business has shown improvement in the last quarter, Levi’s would maintain a cautious outlook due to unpredictable consumer demand.

Gass explained, “There has been a lot of volatility this past year, so we are taking a cautious approach as we look forward.”

Additionally, the company is experiencing transit delays of 10-14 days due to disruptions in the Red Sea, according to Harmit Singh, Chief Financial and Growth Officer.

Levi’s has projected a fiscal 2024 net revenue growth of 1 to 3 per cent, in contrast to analysts’ estimates for a 4.7 per cent increase to $ 6.49 billion, according to LSEG data.

The company expects an adjusted per-share profit of $ 1.15 to $ 1.25, which is lower than the estimated $ 1.33.