Denim giant Levi Strauss & Co. said Thursday that it will slash its global corporate workforce by 10% to 15% in the first half of the year as part of a two-year restructuring plan that seeks 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 $100 million in the current fiscal year. It estimates it will book charges of $110 million to $120 million in the first quarter and said there could be more restructuring changes ahead.
Levi's announced on Thursday that its net revenue was up 3%, to $1.64 billion in the fourth quarter that ended Nov. 26. That came below analysts' expectations for $1.66 billion, according to FactSet.
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The company's CEO said cutting employees will save $280 million in expenses as sales have plummeted in the last two years.
The announcement comes as the company, which has been under the leadership of CEO Chip Bergh since 2011, will be handing over its reins on Jan. 29 to Michelle Gass, who left her CEO role at Kohl's to become president of Levi's in January 2023. Bergh will stay on as executive vice chair 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 $170 million and is subject to approval by the Santa Clara Stadium Authority's board, which is expected to be granted Tuesday. It will give Levi's the stadium's naming rights through the 2043 NFL season.
