Stitch Fix (SFIX  ) has faced significant challenges over the past year, struggling to sustain revenue and user growth. As a response, the company is relying on AI and reducing its dependency on human labor.

In January, Stitch Fix informed its full-time stylists of a shift to part-time roles, allowing them to work flexibly from home. Those unwilling to transition were offered the option to leave.

"As we continue to evolve our business to ensure we are delivering the most innovative, personalized and convenient online styling experience, this week we shared changes to our organization, including moving to a part-time only model for Stylists. The majority of our Stylists work part-time, from their homes, choosing a schedule that suits their lifestyles. By moving to a fully part-time model we are able to maintain this level of flexibility, while effectively meeting the needs of our clients and our business," a company representative said in a statement.

To streamline operations, Stitch Fix has integrated more generative AI into its platform, automating routine tasks traditionally handled by humans. This move shows the disruptive potential of startups and the increasing reliance on AI in the corporate world.

"Writing, reviewing, and approving descriptions for hundreds of thousands of styles in our inventory is a daunting task for copywriters alone, so we trained OpenAI's GPT-3 on several hundred existing product descriptions written by our copywriters, as well as the nuanced feedback our clients share with their stylists (for example: "this dress was more formal and would be great for a wedding,") and product attributes from our brand partners," said the company's press release.

The company now uses AI to tailor clothing selections (Fixes) based on client-provided data.

Stitch Fix reached its peak in January 2021 with over 4 million active users and a stock price of $96.

Since then, the stock has plummeted by over 95%, now trading at $2.41. The latest earnings report shows an 18% decline in net revenue year-over-year, with a 17% drop in active clients.

Stitch Fix has also made multiple changes to its executive team. Leadership changes include the departure of CEO Elizabeth Spaulding in January last year. Founder Katrina Lake briefly stepped in as interim CEO before Matt Barr took over in June.

Recently, the company appointed a new Chief Product and Technology Officer and a new Chief People Officer.