American Apparel Confirms It Might Lay Off 3,500 Workers Next Month

After earlier reports that hundreds of American Apparel workers were told they would be out of a job next month, the struggling retailer confirmed on Monday that it had sent notices to almost 3,500 employees warning them of potential layoffs.

American Apparel, which filed for bankruptcy last month, has notified workers at three of the company’s production facilities in Southern California that their last day of work could be Jan. 6, reports the Los Angeles Times, citing the California Employment Development Department.

So far this year, American Apparel has already laid off at least 500 workers as it trimmed down its production process.

There’s still a glimmer of hope, however, as the company noted on Monday that the WARN notices — required by California — were “purely a legal precaution” and that “layoffs are not certain.”

It all depends on whether or not Canadian company Gildan Activewear’s $66 million bid to buy American Apparel’s intellectual property rights and some other assets is successful. Gildan also might be interested in buying some of American Apparel’s manufacturing plants, which would save jobs in the U.S.

Though the retailer agreed to be acquired by Gildan, American Apparel’s bankruptcy filing allows for an auction that would let other buyers make competing bids. While one requirement for bidders is that they be committed to manufacturing clothes in the United States, those jobs could move anywhere in the country.

Gildan has bid on the company’s intellectual property and manufacturing operations, but not on its retail stores, which would go to another buyer or simply liquidate and close. The company’s stores in the United Kingdom and Australia will close after the holidays.