Amid the turmoil that is the current retail market as a result of the spread of the COVID-19 virus across the globe, Everlane is not faring well. The nearly 10-year old brand celebrated for its affordable “modern essentials” and “radically transparent” approach to the apparel market is coming under fire for its allegedly less-than-transparent approach to the widespread layoffs it enacted last week, and in connection with what U.S. Senator and 2020 Presidential hopeful Bernie Sanders has called “morally unacceptable … union-busting.”
The San Francisco-based startup – which surpassed $100 million in revenue in 2016, “doubled sales annually for the past three years,” Fast Co. reported in 2018 (as of the same year, the company said it was profitable), and become one of the poster-children of the direct-to-consumer retail revolution in the process – made headlines last week when it laid off 180 part-time retail employees and 42 members of its remote “customer experience” staff, and temporarily “furloughed” 68 full-time retail employees.
The Everlane job cuts are some of the latest in a larger movement in retail, which has seen no small number of companies slash their staffs, as cities, such as New York and San Francisco, put formal halts to all “non-essential” business operations in place, thereby, forcing companies to temporarily close their brick-and-mortar operations, and let go of staff. Such large-scale closures across industries, including retail, have prompted the unemployment rate in the U.S. to soar to 3.3 million, the highest it has been since 1982.
While “many [companies are] saying they will continue to pay employees even while they are closed, most small businesses do not have the financial buffer to pay workers for long if revenue dries up,” the New York Times reported earlier this month, and it seems that Everlane is firmly in this camp. Faced with a “significant impact” to its “total business,” and without a “cash balance” to bank on, the company – whose “transparently priced” garments and accessories have found fans in Angelina Jolie, supermodel Karlie Kloss, and Meghan Markle, among others – revealed that it had “to eliminate all part-time associates across the board.”
The mounting layoffs in the retail space can be attributed to “simple math,” Deborah Weinswig, founder of Coresight Research, an advisory and research firm that specializes in retail and technology, told the Times. “You can’t have all expenses and no revenue.” But Everlane’s job cuts are raising some eyebrows, nonetheless.
According to a report from Vice, the fashion brand’s move to cut nearly 200 people from its workforce is striking because it impacts a large percentage of a certain group of the company’s workforce: “a remote [group of] ‘customer experience’ workers who [were] in the midst of unionizing” at the time of the layoffs. As Vice reported on Friday, “nearly all” of the members of the burgeoning Everlane union – “42 of the 57 members” – were laid off just days after having “asked the company for [union] recognition.”
A representative for the group of the “remote [customer experience] team,” which is seeking unionization, told TFL that the union sent an email to Everlane’s CEO Michael Preysman, the company’s Human Resources department and its Director of Customer Experience on March 23, asking for recognition of the union.
“The remote customer experience team at Everlane is officially asking for voluntary recognition of our union,” the email read, according to the union rep, with the latest push coming on the basis of “the unfolding COVID-19 crisis.” The email further asserted that “at a time of such unprecedented uncertainty, it’s crucial to preserve a team whose work saves Everlane hundreds of thousands of dollars annually, builds customer faith in our values, and creates meaningful moments that draw customers back to our brand.” The group claims that they “did not receive a response to [their] request for recognition.”
Four days later, Everlane reportedly enacted its layoffs, and the union says that most of its members were let go.
While an argument could be made that the timing of the union recognition letter and the layoffs is little more than an unfortunate coincidence, particularly given that the layoffs were not exclusively limited to union-affiliated individuals and that 15 people from the customer experience team were “retained and will reportedly be made full-time,” per Vice, members of Everlane Union allege otherwise. Everlane is “using this pandemic as an excuse to gut our movement,” the union claims, citing mixed messaging from the company’s executives in the day leading up to the firings, pointing to a screenshot of Preysman “claiming in an Instagram comment that Everlane’s business has ground to a halt” and contrasting that with “an email [that was sent to Everlane] staff earlier that week boasting that online sales have increased.”
According to Vice, the layoffs came just days after Everlane management “sent an email to staffers assuring them the company was ‘stronger than ever’ during the coronavirus pandemic,” and that the company’s “on-line business has been surprisingly solid.” The publication cited “a memo sent to staffers from a management team member,” which revealed that “the first week of Give Back to the Customer [promotion] generated sales that were +4% [compared to] the pre-crisis forecast, and +32% [compared to] the week prior.”
Meanwhile, a number of the company’s employees told Vice that “they’d been told repeatedly by management in recent days that the business was fundamentally sound and that there was no need for panic,” only to have layoffs ensure shortly thereafter.
Far from merely fading into the frenzied COVID-19 news cycle, the budding union’s message was amplified over the weekend when Senator Bernie Sanders called attention to their cause and tweeted, “Using this health and economic crisis to union bust is morally unacceptable. I’m calling on Everlane to bring workers back on payroll and recognize the Everlane Union.”
In response to Sanders’ tweet, Everlane provided a comment from Pressman, who says he is cutting his salary to zero “during this time.” According to the company’s CEO, the layoffs, which he describes as “the most difficult decision I have ever made as a leader, are “not about the union.”
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