In a security filing published yesterday (11 July) PVH says it is making “additional headcount reductions” to the job cuts that were announced in August 2022 to cut its people costs by 10% by the end of 2023.
PVH’s latest round of job cuts are expected to incur approximately $50m of severance expense, primarily in the second quarter of 2023 with cash payments related to this expense expected to be made over the next 12 months.
PVH explains these severance costs will be excluded from the company’s results on a non-GAAP basis and were not included in its previously provided fiscal 2023 earnings guidance.
The filing reads: “In the third quarter of 2023, the company expects to take additional actions under these plans for which severance costs cannot be estimated at this time. The company expects substantially all actions under these plans to be completed by the end of the third quarter of 2023.”
In August 2022 PVH explained that reducing people costs in its global offices by approximately 10% by the end of 2023 was part of a wider plan to drive efficiencies and invest in growth.
PVH said the company was taking steps to streamline its organisation and simplify its ways of working and planned to use the efficiencies to fuel growth, including in digital, supply chain and consumer engagement.
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The company expected its original set of reductions to generate annual cost savings of over $100m, net of continued strategic people investments.
PVH announced its roadmap to reaching its $12.5bn revenue target by 2025 in April last year. The roadmap called the PVH+ plan detailed how the company plans to use efficiencies and investments in growth, as well product, consumer engagement, a digitally-led marketplace and a data-driven operating model to reach its financial objectives.
In May PVH announced it had partnered with Standard Chartered Bank on a sustainability-linked supplier finance programme to advance its Environmental, Social and Governance (ESG) ambitions across its supply chain.
A PVH spokesperson told Just Style exclusively: “Last August, we shared that we are aligning our organisation and way of working to the PVH+ Plan to simplify how we work, get closer to the consumer, and take advantage of our global scale. The workforce changes we announced this week represent further steps toward our planned 10 percent reduction of people costs in our global offices by the end of 2023. Workforce decisions that impact our people are never easy, and we are providing support for our associates through the transition process. We are confident we are taking the right steps to capture the untapped growth potential of our brands and be competitive for the future.”