Ralph Lauren, in financial straits, lays of 3,600 workers amid pandemic
Ralph Lauren expects to lay off thousands of employees over the next six months as the upscale brand grapples with falling sales.
The company, which like other retailers had to shutter stores during the coronavirus pandemic, announced Tuesday that it will let go 15% of its global workforce as part of a broad reorganization. That amounts to more than 3,600 workers, which Ralph Lauren said will help reduce costs by $180 million to $200 million.
The layoffs come as many clothing retailers have struggled to regain customers after brick-and-mortar stores reopened. Ralph Lauren temporarily closed in mid-March, when COVID-19 cases skyrocketed in the U.S. During the closures, the company cut expenses by furloughing its employees. Company chairman Ralph Lauren also waived his 2021 salary, while CEO Patrice Louvet has taken a 50% pay cut.
Louvet said in a statement Tuesday that the coronavirus pandemic played a major role in the company's plan to reorganize and shed staff.
"The changes happening in the world around us have accelerated the shifts we saw pre-COVID, and we are fast-tracking some of our plans to match them – including advancing our digital transformation and simplifying our team structures," Louvet said.
Ralph Lauren reported a combined $183 million in income losses in its two most recent earnings statements. Louvet told analysts during an August earnings call that the company closed roughly 200 locations in the spring.
Company officials said the layoffs are part of a larger goal to reorganize the company and make it digitally focused so it can capture a "new generation of consumers."
Ralph Lauren has thus far been able to avoid more drastic cost-cutting measures even as competitors — including Brooks Brothers, J. Crew and True Religion — have had to file for bankruptcy.