American Apparel to have more layoffs as part of restructuring plan

Los Angeles - After hiring a new chairman recently as a an executive head change, American Apparel is attempting to revamp itself. However, amidst these plans, the Los Angeles-based retailer is still facing some losses. As a result, multiple workers will get laid off as part of the company’s restructuring plan.

As the company goes through its redesign, part of that plan will require a round of layoffs. The main reason for these cuts are to help cut costs for the company and create “greater inefficiencies on the factory floor,” as reported by WWD. In a letter obtained by the publication, the American-made apparel company stated the news of the layoffs to its employees. The change will also make deliveries of production material more efficient while ensuring “consistency and quality,” according to Apparel News. However, the exact number of employees who will be affected by the cuts was not disclosed to the public. Currently, the company has approximately 2,600 garment workers in its downtown manufacturing warehouse.

American Apparel undergoes multiple layoffs

Since the retailer emerged bankruptcy, it’s clear American Apparel has been surging for a comeback. Last year, the company went through financial issues, store closures, and various controversies. The company’s debt totaled approximately 300 million dollars. After the company was approved for their reorganization plan, American Apparel’s debt was reduced to about 135 million dollars. At the moment, the company is still in its revamping process before any real results can be seen.

The cuts that were announced this week show that the company is working to reduce its overall costs, which proves as a good move financially for the Los Angeles-based brand. Previously this year, American Apparel laid off a round of employees by shuttering its Hawthorne dying house. In total, the company lost 75 workers, with only 20 that were allowed to transfer to another location. Although the layoffs are unfortunate for workers, it may be a good move for the company in the long run.