Clothing manufacturer American Apparel has already cut back on garment lines and now appears to be cutting back on workers too.
Chief Executive Paula Schneider said in a letter to employees last week that cuts would be coming as part of the downtown L.A. firm’s streamlining following its exit from bankruptcy in January.
According to worker advocates, more than 500 employees have already been laid off since last Wednesday. American Apparel declined to comment.
“We are announcing a redesign of our production process, and as a result we will need to reduce our workforce,” Schneider said in the letter, dated April 7.
Worker advocates from Santa Ana-based non-profit Hermandad Mexicana say the cuts started last week and are continuing.
Nativo Lopez, a senior adviser with Hermandad Mexicana, said he estimates that more than 500 people have been laid off already, counting 250 from the downtown headquarters, more than 100 from a factory in South Gate, and another 150 from a site in Garden Grove.
He said hundreds of employees, mostly in the manufacturing and sewing departments, have reported their experience to Hermandad Mexicana, and that the layoffs began Wednesday.
“It’s quite evident to us that it was not revealed in the presentation to bankruptcy court that they’d be laying off so many people,” he said.
Schneider’s letter outlined American Apparel’s plans to streamline operations, beginning by closing stores and reducing the number of items for sale. She also said the factory would possibly outsource “complicated garments,” such as denim items.
“If we do decide to produce some pieces out-of-house, they will still be American-made,” Schneider added.
American Apparel entered bankruptcy last October amid weak sales and heavy debt after ousting the colorful Dov Charney as chief executive, who founded the company 25 years ago. Its reorganization after leaving Chapter 11 bankruptcy took the company private.