American Apparel Cutting 500 Factory Jobs Now

April 13, 2016

American Apparel1American Apparel LLC has a store on 125th Street in Harlem, and with a view to revamping its production process, troubled teen apparel retailer American Apparel is laying off hundreds of workers and may start outsourcing part of its production, the Los Angeles Times reported Tuesday.

The company, which emerged from bankruptcy in February, began the layoff last week. About 500 local employees have lost their jobs so far, the report said. The company has about 4,600 employees in Southern California.

The retailer has been trying to move forward from its tumultuous past that saw the ouster of founder Dov Charney, store closures and huge losses. The fashion chain had filed for bankruptcy in October following years of losses and expects to be profitable in 2018.

In a letter to employees last week, Chief Executive Paula Schneider reportedly said the workforce reduction was the result of redesign of its production process that will include making fewer garments throughout the year to cut down on inventory. Schneider also said a mismatch between workers and manufacturing was an inefficiency that needed to be addressed under its turnaround efforts.

The CEO also hinted that the manufacturing of more complicated pieces, such as jeans, could soon be outsourced to a third-party company, which will still be American-made.

Meanwhile, Charney criticized the latest moves as a betrayal of American Apparel’s foundation. He said he had always resisted outsourcing and searching for ways to pay people less money.

Via source

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