Retail’s peak layoff season is in full swing — and it’s shaping up to be far worse than years past. Through October, US retailers cut over 88,000 jobs, a 145 percent increase from the same period in 2024, according to Challenger, Gray & Christmas, which helps companies navigate layoffs?.
Amazon and Target are among the companies that have recently announced thousands of layoffs.
From inflation squeezing consumer spending to tariffs to shareholder pressure to boost margins, fashion companies have plenty of incentives to downsize. AI automation is another factor, though evidence is thin that the technology is directly to blame for the uptick.
Layoffs are always a risky moment for a company. But there are plenty of ways to make a hard moment even worse. Low morale and a shaky brand identity can amplify internal disruption for those spared the axe, or even lead to a public backlash, as Condé Nast discovered after announcing layoffs at Teen Vogue. Poor communication can do similar damage: Amazon’s decision to inform employees of their layoff via mass texts and emails, per a WSJ report, is certainly one example.
“There are times when … organisations have treated their team as if they were children,” said Scot Johnson, chief human resources officer at Randa Apparel & Accessories, a manufacturer and distributor for brands such as Tommy Hilfiger and Guess. “We can’t share everything with every person, I get that — but they’re adults making decisions about their lives.”
And there’s always the question of whether the right people are being cut. Earlier this year, The Business of Fashion spoke with Farfetch employees who questioned why teams working with top shoppers had been gutted; a cost cutting move that reduced the marketplace’s visibility with an important customer segment.
BoF spoke with brand leaders and human resources experts about how fashion firms can make clear-headed decisions, communicate transparently and, if layoffs are truly necessary, come out stronger on the other side.
Back to Brand Basics
Layoffs that hit morale and productivity the hardest tend to reflect a weak foundation — whether that’s a wishy-washy brand identity (like a company in the midst of its fifth rebrand), a toxic culture or a mission statement that changes with every new creative director.
The companies that weather turbulence best are those with a strong set of values that employees embody on the retail sales floor all the way up to the c-suite, said Scott Markman, founder and president of branding agency MonogramGroup.
In other words, he said, long before a layoff is ever on the table, leadership has already established: “Who the heck are we? How do we think about managing our brand? How do we respond to challenges?”
Companies with strong identities see that clarity show up in how their teams work — whether it’s how they solve problems, sweat the details, move quickly or show up for customers — and those same habits get reinforced through hiring, feedback and the small daily rituals that define culture.
“Nobody wants to cut staff, nobody wants to threaten morale,” Markman said. “But if you have a ‘brand-led’ organisation, you have things to fall back on — a guiding light in turbulent times.”
The best-positioned fashion firms only consider layoffs after leaders have taken a hard look at both the business and the brand — and mapped out a clear plan for where the company is headed, experts say. Any cuts should work backward from that strategy. Without that foundation, leaders can be quick to overreact, mistaking a short-term supply chain snag or macroeconomic wobble as a sign that layoffs are the only answer.
“You have to take a really hard look at how long will this really last?” said Jennifer McGee, a partner in Kearney’s leadership, change and organisation practice.
The Right Calculus
If reductions are necessary, companies should avoid turning them into a numbers-only exercise — hacking away at the balance sheet through across-the-board cuts or “peanut-butter spread” reductions that take 10 percent from every department under the guise of fairness (“everybody should feel it”), McGee said. That approach signals leadership is acting reflexively, not strategically.
“It comes down to the work at the end of the day — making sure the roles you prioritise keeping are the ones that allow you to move that work forward,” McGee said.
Another common pitfall of the numbers game — or of having layoff decisions made too far from where the work actually happens — is overlooking the “culture carriers,” the employees who may not drive the biggest numbers but hold teams together, lift morale and connect the organisation’s disparate parts, McGee said.
“Survivor syndrome is a real thing,” said Johnson. “When you make a change inside an organisation, someone’s lost one of their friends that they’ve been working with… it’s disruptive.”
It’s not that every glue person should be protected if they’re not in sync with the company’s future direction. But leaders should anticipate the impact of losing them — and identify new ones as the business evolves.
In fact, McGee said, when companies clearly articulate a strong new vision, new “culture carriers” often emerge in the aftermath.
How to Communicate
While there’s rarely a good way to tell employees they’re losing their jobs, best practice calls for leaders to be thoughtful, transparent and consistent — both in how they deliver the initial news and how they follow up in the weeks and months that follow.
For larger cuts — and even many smaller ones — a town hall is often a good starting place to create an open forum. But most experts agree the initial conversation should be in person — ideally one-to-one when feasible — with planned updates (emails and smaller team meetings) to the remaining staff in the days that follow.
“You don’t want to be one and done,” Markman said.
Importantly, leaders — particularly those like middle managers who are closer to the day-to-day — should all agree to the plan. Few things derail communication faster than the team lead trying to save face by telling their team the cuts weren’t their call, McGee said.
In cases like mergers and acquisitions, where duplicative roles are inevitable — two IT departments, or overlapping HR and finance teams — companies should move quickly on making the necessary cuts and communicate as early as possible.
“The cadence is pretty clear,” Johnson said. “And you can bet that people are behind closed doors talking about what the business is going to look like in the future. So you don’t buy a lot by obscuring what’s happening.”
Companies that have a pattern of murky communication can face another challenge: the quiet exit of their best talent — from design leads to rising merchandisers — who start to question their own job security.
“Your top talent is someone that the managers should be talking about their career with constantly,” said Randa’s Johnson. “[Those conversations] include asking, ‘How are we seeing your career in the future?’”
Moving Forward
Once the dust settles, the priority is doubling down on the company’s future direction — reminding the people who remain that there’s a plan. In some cases, that can mean pairing the layoff announcement, or following it shortly after, with tangible signs of progress — a new store opening, a revamped e-commerce experience — not as spin, but to generate positive momentum and ground employees in where the company is headed, Markman said.
In that initial town hall and the days that follow, leaders should continue to clarify the impact of layoffs and what those changes mean in practical terms for individual employees, McGee said.
“Are we eliminating some work because it’s no longer part of our strategy? Are we using AI?” she said. “Are we making our work easier to give people confidence that, with the smaller workforce we have, we can still achieve this vision?”
Leaders should talk through those issues candidly, answer questions openly and show confidence in the path ahead.
“I always fall back on: every brand gets to tell its own story,” Markman said. “You get to frame the narrative — good, bad or indifferent. Just because you’re managing through difficult news doesn’t mean that’s the only thing that you have at your disposal.”
