Key points:
- ASOS shares fell at the start of Wednesday's session
- On Monday it was reported that the company will cut 100 jobs
- Asos shares made strong gains Tuesday
ASOS(LON: ASC) shares are down slightly again on Wednesday following Tuesday’s more than 9% gain, which looked to have potentially signalled some upside for the company’s seemingly ever-declining share price.
The rise followed a report the previous day from online publication Retail Week that the online fashion retailer will axe 100 jobs as part of new chief executive Ramos Calamonte’s plans to cut costs at the company.
The report stated that Asos has entered into a 45-day consultation period with staff impacted by the cuts. The cuts are said to have occurred across several departments.
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On Monday, Asos shares fell over 1%. The company’s stock has declined significantly since its pandemic highs, down over 75% in the last 12 months. However, in the last week, it has gained over 13%.
In its final results reported on October 19, Calamonte said that against the backdrop of an “incredibly challenging economic environment,” he has set out a clear change agenda to strengthen the business over the next 12 months, including “a number of decisive, short-term operational measures to simplify the business.”
He added that in recent years, Asos’ quest for growth has resulted in it becoming “excessively capital intensive, too complex and overstretched globally,” resulting in a lack of meaningful growth and scale in key international markets, such as the US, France, and Germany.
The Mirror quoted a spokesperson for Asos saying that simplifying and reducing its “cost profile is a core part of ASOS’ change agenda that was outlined at full-year results.”
“As part of this, we have taken the tough but necessary step to outline proposals to reduce the number of roles across the business,” they added.
Asos shares have begun Wednesday’s session down 3%.