American Apparel prepares for mass layoffs amidst bankruptcy

Los Angeles - As American Apparel is preparing for its last steps of bankruptcy, the company has confirmed massive layoffs for this Monday, January 16. According to sources by WWD, the pink slips will be across the board for the Los Angeles-based retailer.

The publication reports that layoffs will include factory workers as well as high-level management positions. The layoffs, although not publicly confirmed by American Apparel, could be a couple thousand employees. This comes as no surprise as the retailer has neared bankruptcy and has had many issues with its employees already.

Recently, the company struggled with employees lashing out on social media due to the lack of product in their stores. American Apparel stores had signs lashing out at LA headquarters stating “LA send us clothes.” This was due to the company confirming that it would stop European operations in November, which eventually led to many closures across the U.K.

American Apparel may lay off thousands of employees

Additionally, American Apparel confirmed that it would shutter more stores in the past couple of months. In December, the company received confirmation of closing down nine of its locations in the U.S. due to underperforming sales. Along with all of these store closures, there were undoubtedly layoffs, so the next round of terminations isn’t completely out of the blue.

As Gildan Activewear has been confirmed as the winner of the company’s bankruptcy auction for 88 million dollars, the acquisition may have had an effect on existing American Apparel employees. According to WWD, Gildan is expected to keep some of the employees through the transition period, however the number was not disclosed. Currently American Apparel has not commented on this speculation.

Photo: FashionUnited

 

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