While often these days, we are hearing about Levi Strauss in the context of their sustainability initiatives, vintage and heritage revitalization, or even skateboarding-inspired collections, today they announced that 500 jobs are about to be eliminated.
Levi’s has been undergoing various phases to streamline its global productivity and deal with the fractured marketplace of denim. Never again will Levi’s own as big of a share of the denim industry as it once did. Not with so many brands containing denim with their various collections and the growing demand for niche brands and online shopping patterns among a new youth marketplace. As our data has shown, shifts in denim preferences have changed dramatically, especially in the last 5 years.
However, its latest announcement, which is a 5-year strategic agreement with an outsourcing firm called Wipro Limited, basically now outsources much of what Levi’s used to do. It also illustrates just how stressed the denim industry, and fashion in general, actually are today.
Under this new agreement, Wipro will be handling all of Levi’s technology, business processes, and dealing with consumer relations, which Levi’s says will be a cost savings of between $175-$200 million dollars. The cost? $45-$55 million from Levi’s to Wipro over the next 5 years.
For more on the state of denim and youth culture markets, check-out our subscriptions for 2015.