American Apparel cutting factory jobs
Apr 11, 2016
American Apparel Inc., which reemerged from bankruptcy in February, plans to cut up to 450 jobs at its facilities in Garden Grove, downtown Los Angeles and South Gate, according to its workers’ union.
The clothing maker and retailer laid off more than 80 employees at it’s Garden Grove factory and could cut a total of 150 jobs by next week, reported the Orange County Register.
An employee cuts fabric at the American Apparel factory in downtown Los Angeles. The company is cutting 450 jobs, some coming from the downtown factory.
Up to 450 sewers, auxiliary workers and supervisors will be laid off in total, Nativo Lopez, an adviser with the General Brotherhood of Workers of American Apparel, told the newspaper.
Laidoff workers received a severance package based on the number of years employed with the company, according to the union. The union claimed the layoffs come at a time when it’s seeking certification as the exclusive collective bargaining unit at American Apparel with the National Labor Relations Board.
According to Sourcing Journal, a trade publication for the textile industry, CEO Paula Schneider notified employees in a letter that manufacturing at its 800,000-square-foot factory in downtown would be condensed to a single floor. The streamlining effort resulted in the layoff of at least 100 of the factory’s 2,600 workers, according to to the nonprofit Hermandad Mexicana. In addition, a fabric dyeing and finishing facility in Hawthorne was recently closed and less than half of its 75 employees were transferred to Garden Grove.
American Apparel reemerged from Chapter 11 bankruptcy after a judge approved a reorganization that gave ownership of the company to senior lenders. The company filed for bankruptcy in October, after struggling with poor sales and continued losses amid a protracted conflict with founder and former CEO Dov Charney.
Charney, who had been seeking to rejoin the company since his ouster, has said he is focused on creating a new business that will compete with American Apparel.
Charney told Bloomberg earlier this month that he believes his decision to build American Apparel’s factory in downtown L.A. helped revitalize the district and he wants to start a new business in South Central L.A.