Layoffs at Levi’s as new CEO takes the reins

Levi Strauss & Co. is entering a new era — with a new path.

The denim giant unveiled a two-year “multiyear global productivity initiative”  — called Project Fuel — designed to accelerate its ongoing direct-to-consumer focus while fueling long-term profitable growth. The plan includes a 10% to 15% reduction in the company’s global corporate workforce in the first half of 2024, for which it expects to record estimated restructuring charges of $110 to $120 million in the first quarter. 

Levi’s new plan will be overseen by Michelle Gass, the former Kohl’s chief who was appointed president the company in 2023. Gass officially takes the reins of the company from longtime CEO Chip Bergh, who is retiring, on Monday, Jan. 29. 

“We have a strong pipeline of newness and innovation launching this year to fuel consumer demand,” said Gass. “And I am confident in the significant growth opportunities ahead for this company- including accelerating international growth, becoming a denim apparel lifestyle business, and leading with DTC.”

Levi’s announced the plan in its fourth-quarter earnings report. For the quarter ended Nov. 26, sales rose 3% to $1.6 billion, led by a 6% gain in the Americas, to $888 million.  Sales were up 2% in Europe, hitting $379 million and rose 4% in Asia to $262 million. (For the full year, Levi’s reported net revenues of $6.2 billion.)

Levi’s direct to consumer net revenues increased 11%, driven by broad-based growth in both company-operated mainline and outlet stores and e-commerce. As a percentage of fourth quarter net revenues, DTC comprised 42% of total net revenues as compared to 39% in the fourth quarter of 2022.

Net income was $127 million compared to $151 million in the year-ago period. Adjusted net income was $179 million compared to $137 million in the year-ago quarter.

“While 2023 was a challenging year, we ended on a strong note and I am optimistic about the future,” said Bergh. “I couldn't be more confident in Michelle as my successor, and together with the rest of our team, they position the company to thrive in its next phase of growth.” 

Levi’s products are sold in more than 110 countries worldwide through a combination of chain retailers, department stores, online sites and a global footprint of approximately 3,200 retail stores and shop-in-shops. The company’s brands include Levi's, Signature by Levi Strauss & Co., Denizen, Dockers and Beyond Yoga.^.