Another 500 Employees Will Be Laid Off In The Second Stage Restructuring Plan Of Levi'S Parent Company

Levi Strauss&Co., the parent company of Levi's Levi's Levi's, an American denim clothing brand, yesterday released the second phase of business restructuring and cost reduction plan, saying it would continue to scale Layoff 。

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Levi Strauss&Co. said that the Group has cooperated with Wipro Limited (NYSE: WIT), a global technology service provider Wipro signed a strategic agreement worth at least $143 million for five years, which will include outsourcing of IT, finance, human resources, customer service and consumer relations from the first quarter of 2015. This means that relevant positions will be removed from Levi Strauss&Co., involving about 500 employees. The Group will also continue to reduce management levels, eliminate duplicate positions and change the structure. This phase will generate $45 million to $55 million in restructuring and related cost , most of which will be recorded in the fourth quarter of fiscal year 2014. In addition, Levi Strauss&Co. will pay Wipro Limited (NYSE: WIT) a service fee of at least US $143 million, and the final expenditure will depend on the actual demand of the group for services.

In the first phase of the business restructuring and cost reduction plan, Levi Strauss&Co. has reduced about 800 non retail and non manufacturing jobs, accounting for nearly 20% of the total number of employees, and is expected to save $75 million to $100 million annually.

The whole plan starts from March, and is expected to last for 12-18 months, with the goal of reducing operating costs by $175-200 million annually. In the third quarter as of August 24, 2014, the plan has already spent $103 million, and the annual cost savings will reach $100 million to $125 million, higher than previously expected.

Levi Strauss&Co.'s profit in the third quarter continued to decline, falling to $50.62 million, or 11.3%, from $57.075 million in the same period last year. Dragged down by the weakness of North American business, the total revenue was US $1154.1 million, up 1% from US $1141.3 million in the same period last year; Gross profit recorded US $562.2 million, a decrease of 2%, and gross profit margin dropped by 150 basis points from 50.2% in the same period of last year to 48.7%; Due to the low gross profit rate, the third quarter business profit It fell to 105.1 million US dollars from 118.1 million US dollars in the same period last year.