Stitch Fix shares sink as company lays off 15% of its salaried employees

The Stitch Fix logo on a smartphone arranged in Hastings-on-Hudson, New York, U.S., on Saturday, June 5, 2021. Stitch Fix Inc. is scheduled to release earning on June 7.

Stitch Fix is laying off 15% of its employees, mostly in corporate roles, according to an internal memo that was seen by CNBC.

The company's shares fell about 9%. A year ago, shares traded as high as $68.15

The job cuts come as the online styling service has been grappling with higher expenses on everything from its supply chain to marketing to labor.

Stitch Fix CEO Elizabeth Spaulding said in the memo that they have taken a renewed look at their business. It was necessary for us to position ourselves for profitable growth.

Roughly 330 people were told of the cuts on Thursday. About 4% of the company's total workforce is represented by that number.

The U.S. labor market is becoming more conservative with its hiring, but airlines, restaurants and hotels still struggle to fill roles.

Three months after Stitch Fix cut its revenue guidance, it is laying off workers. The company's active client count wasn't where she wanted it to be

During the early stages of the Covid epidemic, Stitch Fix's business was seen as a bright spot because it was all online. It didn't go as well as the company had hoped for with its new direct- buy option. As restrictions on travel are lifted, more and more people are going to stores to spend their money.

Stitch Fix is expected to report results after the market closes.

The market cap has fallen due to the stock decline.

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