More than 300 employees at Levi Strauss & Co. are expected to lose their jobs due to the closure of the denim giant’s Hebron, Ky. distribution center.

Employment separations are expected to begin on Aug. 30. The company first indicated last June that it was closing the 772,150-square-foot Kentucky facility. At the time, the closure was expected to impact 346 employees, but the building was kept open for another year to fulfill high demand as it transitioned products to other warehouses slower than initially expected.

Levi’s associate general counsel Emily Knoles filed the Worker Adjustment and Retraining Notification (WARN) Act Notice on June 30.

Some of the 303 employees affected will be able to apply to another company location, according to the WARN notice.

Bumping rights, which allow senior staff whose positions have been eliminated to take roles held by less senior staff, are available to union workers who are represented by Workers United Local 2550 and its international group.

The real estate shift comes the company aims to outsource more of its logistics capabilities, moving toward a more hybrid system in which global distribution and fulfillment centers are transitioned to third-party logistics providers (3PLs) who can carry more of the cost burden.

The Hebron center is one of Levi’s three remaining distribution facilities directly owned by the company as of Nov. 30. The company also owns distribution centers in Henderson, Nev. and Etobicoke, Canada, and operates eight more under a lease including an automated e-commerce fulfillment center in nearby Erlanger, Ky. That 575,700-square-foot facility opened in July 2023, and handles online orders across the eastern U.S.

Two other distribution centers in Groveport, Ohio and Dorsten, Germany are operated by Maersk and GXO, respectively.

In an April earnings call, Levi Strauss & Co. chief financial officer Harmit Singh said the company was working towards completing the transition in the U.S. by mid-year.

“Longer term, this transition positions our network to support omnichannel growth and drive efficiency,” said Singh.

Management has repeatedly framed the transition costs as temporary, arguing that a leaner distribution network should improve margins once warehouse consolidations are complete and fulfillment operations normalize.

Distribution costs in the company’s first quarter, which ended March 1, increased 7.4 percent to $123.3 million largely due to an unfavorable impact in currency exchange rates alongside increased volume. Impact from the closure of Levi’s owned distribution center in Canton, Miss. largely offset the increase in expenses, the company said.

During the call, Singh said the distribution center transitions in Ohio and Germany have both “stabilized.”

“We’re doing more omnichannel fulfillment, and that’s making a difference. It took us a little while, but distribution costs in Europe now are scaling down as a percentage really well,” said Singh. “In the U.S., we continue to be committed to reducing the transition costs as the year progresses, and we’ll do it in a way where we prioritize the incremental demand that we are seeing with the costs incurred. Because we have seen volumes really pick up, and fulfilling that has been great.”

According to Singh, he expects additional transitional costs to taper off as the year progresses, beginning in the second half.

Distribution costs as a percent of revenue decreased in the quarter, down to 7.1 percent of net revenues from the year prior’s 7.5 percent. When asked when the company expects to get to 5 percent of revenue, Singh said he would not comment on the timing.

“Our new supply chain leader and the new distribution experts that we have are committed to improve both the flow through, so we drive higher volume throughput as well as lower cost over time,” said Singh. “It’s built into our plan.”

The apparel seller’s Project Fuel restructuring began in 2024 to consolidate operations and cut costs as it pivoted to being a DTC-first brand. In the first half of that year, the company laid off more than 10 percent of its workforce.

Job cuts have continued elsewhere as the company Levi’s laid off 44 employees last year at its San Francisco headquarters between September and December following its sale of Dockers to Authentic Brands Group.

Levi Strauss & Co. expects to report second-quarter earnings before market open on Wednesday.