After an audit of American Apparel's employee records, the federal Immigration and Customs Enforcement informed the company that documents for about 1,800 current workers, representing about one-third of its Los Angeles-based work force, were either illegally working in the U.S. or potentially illegal to work.
The workers were given 30 to 60 days to produce additional documents proving their eligibility. Of the 1,800 workers identified, 1,600 were deemed to be unauthorized to work. The agency wasn't able to verify the status of 200 others.
American Apparel's founder, Dov Charney, has been an outspoken opponent of U.S. immigration policies. In a letter to employees, Charney said he was "deeply saddened by the fact that many of you will be leaving the company over the next few days and weeks. Many of you have been with me for so many years, and I just cry when I think that so many people will be leaving the company."
He added that when workers are able to "get (their) immigration papers in order" they will be given priority treatment for future positions in the company.
The company previously said it was not found to have willingly hired illegal workers. American Apparel has touted its "sweatshop-free" operation and said it pays some of the highest wages in the industry.
The company, which employs a total of about 10,000 workers, operates 275 retail stores in 20 countries. It also operates a wholesale business that supplies T-shirts and other casual wear to distributors and screen printers.
Shares of American Apparel rose 2 cents to close at $3.55 Thursday.