Levi Strauss & Co. is planning to reduce its corporate workforce 10 percent to 15 percent during the next six months as part of its “productivity initiative” to drive long-term growth. The initiative, a two-year program named Project FUEL, is designed to accelerate the execution of Levi’s brand-led and direct-to-consumer first strategies while fueling long-term profitable growth.
Levi’s said its focus is will be on optimizing its operating model and structure, redesigning business processes, and identifying opportunities to reduce costs while simplifying processes across the organization. In fiscal 2024, it’s expected this initiative will generate net cost savings of $100 million. Levi’s also expects to record estimated restructuring charges of $110 million to $120 million in the first quarter.
Total Retail’s Take: This news, which was announced on Jan. 25, came shortly after other retailers made similar announcements. Earlier this month, for example, Macy’s said it would lay off about 3.5 percent of its total employee headcount, which amounts to roughly 2,350 employees. Also last week, online furniture seller Wayfair said it is cutting about 1,650 jobs, or 13 percent of its global workforce.
The news also came four days before Michelle Gass assumed the CEO role at Levi’s. Gass left her CEO job at Kohl’s to become president of Levi’s in January 2023. Chip Bergh, Levi’s former CEO. will stay on as executive vice chair until he retires in late April.
“We have a strong pipeline of newness and innovation launching this year to fuel consumer demand,” said Michelle Gass, president and incoming chief executive officer of Levi’s, in a company statement. “I am confident in the significant growth opportunities ahead for this company, including accelerating international growth, becoming a denim apparel lifestyle business, and leading with DTC. The success of these strategic initiatives drove our growth in the fourth quarter and position us to create outsized long-term shareholder value in the years ahead.”
