Online styling service Stitch Fix (SFIX) is reportedly laying off 1,400 stylists that are based in California by the end of September as it looks to hire stylists in more cost-effective markets.

The layoffs affect about 18% of Stitch Fix’s workforce, which the company said it plans on replacing with 2,000 stylists from places such as Austin, Texas, and Minneapolis, CNBC reported.

Stitch Fix founder and CEO Katrina Lake told the news outlet in a statement, “We have taken the very difficult decision to reduce the number of stylists in our styling team in California, as we invest in our other styling hubs across the US, and the innovations that will help evolve our experience in the future. All of our California-based stylists will be offered the opportunity to relocate to the new roles in other states.”

A spokesperson for the company told CNBC that Stitch Fix will be hiring stylists outside of California, beginning this summer and into 2021. Those stylists that opt not to relocate will reportedly receive a minimum of two-weeks severance pay, healthcare benefits, and job placement assistance in addition to a stay on bonus during the layoff period.

Stitch Fix uses a team of stylists to select clothing and accessories for customers, shipping them as a monthly subscription service, where they can be worn, returned, or kept.

Shares of Stitch Fix stock were up 1.44% as of 11:36 a.m. EDT on Tuesday.

Stitch Fix
Stitch Fix is laying off 1,400 stylists in California. Fashion on display during the 71st Annual Parsons Benefit honoring Pharrell, Everlane, StitchFix & The RealReal on May 20, 2019 in New York City. Getty Images/Astrid Stawiarz