American Apparel Lays Off Workers, Considers Outsourcing

Grow Your Business, Not Your Inbox

Stay informed and join our daily newsletter now!
1 min read
This story originally appeared on Reuters

Teen apparel retailer American Apparel LLC is laying off hundreds of workers as it overhauls its production process, which could include outsourcing part of its production to another U.S. manufacturer, the Los Angeles Times reported on Tuesday.

"If we do decide to produce some pieces out-of-house, they will still be American-made," Chief Executive Paula Schneider wrote in a letter obtained by the Times.

Schneider said a mismatch between workers and manufacturing was an inefficiency that needed to be addressed as part of the company's turnaround efforts, the Times reported, adding the move came after "months of careful and rigorous review."

The retailer will also cut down on the number of garments it makes throughout the year, to clear inventory.

As part of the layoffs, which started last week, about 500 employees have lost their jobs, the newspaper said.

An American Apparel spokeswoman declined to comment.

The fashion chain, known for its "Made in the U.S.A." fashion, filed for bankruptcy in October following years of losses and expects to be profitable in 2018.

(Reporting by Arunima Banerjee in Bengaluru; Editing by Peter Cooney)

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Let us help you take the NEXT step. Whether you have one-time projects, recurring work, or part-time contractors, we can assemble the experts you need to grow your company.

Latest on Entrepreneur