DENIM NEWS

Levi’s Laying Off 800 Employees in Restructuring Effort

Levi Strauss & Co. in San Francisco is going on a diet to reduce $175 million to $200 million a year in expenses.

The maker of Levi’s and Dockers pants said it is laying off 800 employees, or 20 percent of the workforce in its non-retailing and non-manufacturing sectors of the company to save $75 million to $100 million a year. The company employees 16,000 people worldwide.

One-time charges for severance pay and restructuring will cost the company approximately $65 million in the first quarter.

Levi’s said jobs will be eliminated to reduce management layers, remove duplicative roles, regroup country clusters and increase spans of control.

Other initiatives to reduce costs include:

• Streamlining the company’s product development, planning and go-to-market strategies

• Implementing efficiencies across the company’s supply chain and distribution network

• Adopting lower- cost, service-delivery models

• Continuing to pursue more disciplined procurement practices

Levi’s President and Chief Executive Chip Bergh said the changes will make the company more competitive and help it focus on innovation, retail productivity and omni-channel capabilities.

Levi’s had a good financial year last year with $229 million in profits on $4.7 billion in revenues. That was up from 2012 when the company had $144 million in profits on $4.6 billion in revenues