VF Corp., the parent of brands such as Vans, The North Face and Timberland, has laid off approximately 500 corporate employees across the organization. The news comes about one month after the company unveiled its “Project Reinvent” transformation, which was designed to alleviate pressure from an activist investor.
“As part of VF’s new Reinvent strategy, and with the aim of improving operational efficiency, we have eliminated approximately 500 salaried positions across the company globally,” the company said in a statement provided to sister Emerald publication Shop. Eat. Surf. “While these decisions are never easy, they will give us the financial flexibility to invest behind our brands and better position us for long-term growth. We’re committed to handling this restructuring with dignity and respect for all involved and want to thank those impacted for their valued contributions to VF.”
Sources confirmed to Shop. Eat. Surf that the reductions are global and impact all brands and corporate functions, with Vans specifically prioritizing several director and vice president positions.
Poor Q2 Results Spurred Investor Involvement
For Q2 2024, which ended Sept. 30, 2023, VF reported significant losses across the business, including a 1% drop in wholesale, largely driven by the Americas, which fell 11%, and a 3% decrease in the direct-to-consumer business. The company reported revenue of $3.03 billion, down 4% in constant currency, as well as a net loss of $450.7 million. The only bright spots for the quarter were The North Face, which saw double-digit revenue growth and an expanding international business.
During an earnings call discussing the results, VF unveiled Reinvent, a “comprehensive program” to help right the ship. Two big priorities were reducing costs and strengthening the balance sheet, both of which likely influenced the company’s decision to reduce headcount.
As a result of these lackluster results and the pressure to put Project Reinvent into motion, VF Corp. withdrew and revised its previous 2024 fiscal revenue and earnings guidance. Of note, the company reduced its expected free cash flow for the year from $900 million to $600 million, citing a “more difficult U.S. wholesale environment” and struggles within the Vans business.