Levi Strauss announces it will cut an additional 500 jobs

By

Olivier Guyot

Published
Nov 12, 2014

After 800 jobs cut since the beginning of the year, the American group has announced the second stage of its job cuts plan called "Global initiative for productivity". This plan aims to subcontract part of the group's general services, meaning the elimination of 500 jobs.

The goal is clear: to reduce the Levi Strauss & Co group's annual costs by at least 175 million US dollars (111 million pounds). Or more or less 10% of its costs compared to its 2013 financial year ended 24 November 2013.

To accomplish this, the management board of Levi Strauss & Co., which owns Levi’s and Dockers, chaired by Chip Bergh, has created the "Global initiative for productivity". A restructuring plan whose first stage, which took place over the last eight months, aimed to cut 800 jobs internationally. 20% of the group's operational staff excluding stores and production units were affected.

Having started off well, and even finished in several regions, the group, which ends its 2014 financial year in two weeks, is preparing, as predicted by Fashionmag Premium this summer, to launch a second phase.

This phase includes the elimination of 500 jobs. Levi Strauss & Co has indeed chosen to subcontract some of the group's central human resources, IT, financial, customer service and customer relations services to Wipro Limited.

The 5-year agreement involves at least 143 million dollars. Levi Strauss & Co. will start handing over files to the Wipro group at the beginning of the first quarter of the 2015 financial year, meaning next month.

Once again, management highlights its intent to cut middle management job positions as well as duplicate jobs between geographic zones. It aims for a simplification of its planning strategies, to focus on the market and distribution.

"We are making solid progress," points out Harmit Singh, the group's administrative and financial director. "And I expect the measures announced today to help us simplify the way we work, to improve our productivity levels, to increase our flexibility, and to reduce our costs even more."

For the time being, the group has not given any numerical figures on the regional breakdown of the job cuts.

The Levi Straus group has 2,600 stores and shop-in-shops in the world and posted revenue of 4.68 billion dollars in 2013, for an operational result of 464 million dollars.

1 USD = 0.632909 GBP