Dive Brief:
- Adding to the list of direct-to-consumer retailers cutting jobs, apparel brand Everlane on Friday confirmed to Retail Dive that it was laying off 17% of its corporate staff and less than 3% of retail employees. In total, the company said 8.6% of all employees would be impacted.
- The decision was made to refocus its efforts, “right-sizing teams across several departments and at select retail locations,” the company said via email.
- Everlane’s CEO Andrea O’Donnell told employees that three of its brick-and-mortar locations would be impacted, according to an internal memo reviewed by Retail Dive. O’Donnell also noted in the memo that the company’s “strategy and initiatives have not shifted,” and the layoffs were a result of market changes.
Dive Insight:
Everlane’s latest news reflects a growing trend across retail, where macroeconomic pressures are leading to layoffs. Amazon, Helen of Troy and Stitch Fix are just a few companies that announced job cuts this week.
For Everlane, the layoffs demonstrate its intent to inch closer to profitability.
“It’s no secret that these are difficult times for venture-backed companies. The expectation to be profitable shifted overnight. My view has always been that layoffs are a last resort, so over the past year we focused on cutting other large costs and driving efficiency before taking this step,” O’Donnell said in Everlane’s internal memo. “While we continue to perform as a business and a brand, the inflationary environment and recessionary risk has created continued pressure. Today’s tough decision is intended to set us up to improve profitability in 2023.”
The world of venture funding is indeed a difficult one right now, with CB Insights' most recent data from October finding global funding reached $74.5 billion in Q3 2022 — down 34% from the previous quarter. Deals fell 10% from Q2 to 7,936 total.
Everlane — which is a sustainability-focused retailer — scored a $25 million term loan from global restructuring and investment firm Gordon Brothers in November. The loan was taken on in order to support growth for the brand.
Everlane’s founder Michael Preysman announced he’d step down from the CEO post in September 2021, with O’Donnell officially taking over the chief role in January 2022. O’Donnell brought five years of experience as the president of the footwear brand Ugg.
