Hanesbrands said it is cutting back on payroll amid fiscal challenges and falling sales.
“We continue to operate in a very challenging environment, and we must focus on controlling costs as we continue to execute our Full Potential plan,” Kirk Savile, senior vice president, corporate affairs and communications for Hanesbrands, told Sourcing Journal. “As a result, we made the difficult decision to eliminate a number of positions across our company. These are valued associates, and we thank them for their many contributions to Hanesbrands.”
The Hanes, Champion, Bali and Playtex owner declined to specify how many jobs would be impacted by the layoffs. The company said it would reveal additional details when it reports fourth-quarter earnings on Feb. 2.
November’s third-quarter report showed a 7-percent drop in sales. At the time Hanesbrands said it expected fiscal 2022 to reach net sales of about $6.16 billion to $6.21 billion for a 6 percent decline from the year prior. It also projected two months ago that Q4 sales would fall 15 percent versus the same period in 2021, with sales ranging from $1.40 billion to $1.45 billion.
CEO Stephen B. Bratspies said macroeconomic conditions had prompted a slowdown in consumer spending in the U.S. and Asia while U.S. retailers struggled to shed high inventory and slow-moving stock.
“In just six months, we’ve seen the consumer and retail landscape flip from one with too much demand and not enough supply to one with too much supply and not enough demand,” Bratspies said. “Inflation is hitting consumers’ wallets and slowing demand. Retailers broadly are sitting on too much overall inventory, which is impacting orders in different ways across our business.”
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Hanesbrands is focused on streamlining processes and cutting costs where possible. Bratspies said it was intent on increasing speed and flexibility through its Full Potential global supply chain initiatives, with the goal of improving cash flow generation while expanding margins. Hanesbrands conducted an analysis of its global network to identify growth opportunities and cost-cutting measures last year, resolving to consolidate its network of distribution centers in the U.S., moving to fewer, larger facilities, while doubling down on automated processes. It also noted in November that sourcing operations would see actions to reduce cost and improve speed to market.
Many businesses have responded to an economic slowdown by shedding jobs. Companies including Gap, VF, Saks.com, Wolverine, Amazon, Flexport, Allbirds, Bed Bath & Beyond and Klarna have all announced layoffs in recent months.
Additional reporting by Jessica Binns.