Levi Strauss & Co is planning to reduce 10 to 15 per cent of its global corporate workforce during the next six months as part of its “productivity initiative” to drive long-term growth.

A two-year program, named Project Fuel, is designed to accelerate the execution of the company’s Brand Led and DTC First strategies while fueling long-term profitable growth. 

The firm expects the initiative will generate net cost savings of US$100 million in FY24. 

The job cuts will be included in the first phase of Project Fuel. As a result, Levi Strauss & Co will record estimated restructuring charges of $110 to $120 million in the first quarter.

“We are focused on margin execution supported by gross margin expansion and by our global productivity initiative, which gives us a clear line of sight to significant annual cost savings,” said Harmit Singh, chief financial and growth officer.

Levi Strauss & Co reported net revenues of $6.2 billion for the year ended November 26, which were flat compared to FY22 (and flat on a constant-currency basis). Adjusted net income was $441 million, down from $604 million in FY22.

The company expects net revenue growth of 1 to 3 per cent this year, including an expected two-point negative impact attributable to the decision to exit the Denizen business and planned lower off-price sales.

“While 2023 was a challenging year, we ended on a strong note and I am optimistic about the future,” said Chip Bergh, president and CEO of Levi Strauss & Co. 

Incoming CEO Michelle Gass said she is confident in the growth opportunities this year thanks to a “strong pipeline of newness and innovation” aiming to fuel consumer demand.

“The success of these strategic initiatives drove our growth in the fourth quarter and positioned us to create outsized long-term shareholder value in the years ahead.”