Los Angeles-based American Apparel is planning to layoff about 1,500 employees who are "unauthorized" to work in the United States, it was reported on Thursday.
The report coincided with American Apparel's announcement on Thursday that the company recorded a 20-percent year-over-year drop in retail store sales for August.
The company said the employees would be fired due to their immigration status, according to the Los Angeles Times.
A federal inspection of American Apparel's employment records indicated that about 1,600 employees weren't authorized to work in the U.S., the paper said.
As of Aug. 31, American Apparel employed about 10,000 people and operated more than 275 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria and China.
About 200 other employees were also found to have discrepancies in their employment records, according to the paper.
"There are approximately 1,500 workers facing termination during the month of September," Peter Schey, an attorney for American Apparel, told the paper.
Schey said the company was "very disappointed and disheartened" at having to terminate a large number of workers who have been "reliable contributors" to the company's success.