Under new management and amid worker discontent, American Apparel Inc. is laying off about 180 employees as it tries to engineer a comeback, it was reported today.
Most of the job losses are coming from American Apparel’s sprawling manufacturing operations in Southern California, the Los Angeles Times reported.
The layoffs will involve 3.8 percent of the company’s approximately 4,800 manufacturing and office workers in Southern California, according to The Times. Employees at the nearly 250 American Apparel stores won’t be affected. In all, the company employs nearly 10,000 people.
“It’s a tough day,” Paula Schneider, who took over as chief executive in January, nearly a month after the board fired Dov Charney for alleged misconduct, told The Times in an interview Wednesday. “We’re in a turnaround. This is a company that hasn’t made money in years.”
American Apparel has racked up about $340 million in net losses in the last five years and has more than $200 million in debt, The Times reported.
Schneider told the newspaper that the layoffs would help realign the workforce to meet the company’s changing production needs. American Apparel plans to produce 30 percent fewer styles this year compared with 2014, she said, which means the company needs fewer manufacturing workers.
The Los Angeles company had already been furloughing factory workers and slashing hours. Schneider said her goal “is to get as many employees as possible back to work full time.” But she said she couldn’t rule out additional layoffs.
