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Stitch Fix, the personal styling company founded in 2011, is eliminating its full-time stylist positions.
The San Francisco-based company shared the news with employees earlier this month and a spokesperson confirmed the change in an email to Inc.:
"As we continue to evolve our business to ensure we are delivering the most innovative, personalized and convenient online styling experience, this week we shared changes to our organization, including moving to a part-time only model for Stylists. The majority of our Stylists work part-time, from their homes, choosing a schedule that suits their lifestyles. By moving to a fully part-time model we are able to maintain this level of flexibility, while effectively meeting the needs of our clients and our business."
Full-time stylists--which comprise about a quarter of the company's 2,620 stylists, as of June 2023--have been given the option to shift to part-time roles. Those who decide not to make the transition will be granted severance pay, healthcare, and career transition support. Sources familiar with the matter shared that the changes will be effective as of March 31. Additionally, 10 "Styling Leader" positions were eliminated; those employees received compensation packages.
This change comes about six months after the company announced the appointment of a new CEO, Matt Baer, replacing Katrina Lake, interim CEO and founder. Lake had returned to the role last January, after stepping down and transitioning to an executive chairperson role in August 2021. Upon Baer's appointment, she maintained her chairperson role.
In the company's most recent earnings call in December, Baer shared that Stitch Fix would "continue to focus on optimizing the business in the short term while working to
reimagine our business and operating model with the goal of delivering sustainable and profitable growth in the future." The company's financial results for the first quarter of fiscal 2024 showed an 18 percent YoY decline in revenue--a smaller decrease than it saw in the prior two quarters--and a 6 percent YoY decrease in net revenue per active client. That's compared to a 9 percent decrease in the prior two quarters.
Clearly, the company is bent on cost-cutting measures, and its shift to part-time only work for stylists may reflect its strategy for growth, adjusting its balance of technology and human capital.
Stitch Fix has openly used algorithms to drive its product recommendations since launch; it pulls customer data to provide clothing recommendations to stylists, who then fine-tune those recommendations before sharing them with customers. "Our stylists provide a personal touch, offer styling advice and context to each item selected, and help us develop long-term relationships with our clients," the company shared in its most recent Form 10-K.
But it does appear the company is evolving the way it uses data and technology. A blog post published on Stitch Fix's website in June details how the company was embracing generative AI to "distill text on a large scale and generate concise recaps" to drive efficiency and accuracy for stylists. The company is also experimenting with data-focused partnerships; this week, it launched a "Style Tune Up" activation in partnership with Spotify.
The company's recent organizational shift may be a sign that technology has enhanced the capacity of individual workers, allowing for the elimination of full-time positions. It's unclear yet what impact this may have on the future of the business, or how its use of technology may continue to evolve--but it doesn't appear that the company has any plans to fully replace roles with AI. "The pairing of data science and human judgment drives a better client experience and a more powerful business model," the company shared in its most recent Form 10-K. "For clients who prefer the assistance of a stylist, these stylists add a critical layer of contextual, human decision making that augments and improves our algorithms' selections and creates the ultimate personalization experience."
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How Stitch Fix is Cutting Costs Without Conducting Mass Layoffs
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25.01.2024
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Stitch Fix, the personal styling company founded in 2011, is eliminating its full-time stylist positions.
The San Francisco-based company shared the news with employees earlier this month and a spokesperson confirmed the change in an email to Inc.:
"As we continue to evolve our business to ensure we are delivering the most innovative, personalized and convenient online styling experience, this week we shared changes to our organization, including moving to a part-time only model for Stylists. The majority of our........
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