Levi’s to cut staff by up to 15 per cent

Denim giant Levi Strauss & Co. said it is slashing its global corporate workforce by 10 to 15 per cent in the first half of the year as part of a two-year restructuring plan to cut costs and simplify its operations.

The company employed about 19,100 people as of the end of November, according to its annual report filed with securities regulators.

San Francisco-based Levi’s said the restructuring is expected to generate net cost savings of US$100 million ($163.75m) in the current fiscal year. It estimates it will book charges of US$110m to US$120m in the first quarter and said there could be more restructuring charges ahead.

Levi’s also announced its net revenue was up 3 per cent to US$1.64 billion in the fourth quarter that ended on November 26. That came below analysts’ expectations for US$1.66b, according to FactSet.

The announcement comes as the reins of the company, which has been under the leadership of chief executive Chip Bergh since 2011, are handed over on Monday to Michelle Gass, who left her chief executive role at Kohl’s to become president of Levi’s in January last year. Bergh will stay on as executive vice-chairman until he retires in late April, Levi Strauss said.

Levi’s announced the layoffs the same day it unveiled a proposed 10-year extension to the naming rights for Levi’s Stadium, home of the San Francisco 49ers. The deal is worth a combined US$170m and is subject to approval by the Santa Clara Stadium Authority’s board, which is expected to be granted next week. It will give Levi’s the stadium’s naming rights through the 2043 NFL season.