A beloved American crafting institution, Joann Fabrics, has gone bankrupt not once—but twice. 

The chain of stores had been facing headwinds for decades as sewing in America transformed from a necessity into a niche hobby. And despite a few boom years during the pandemic, its other struggles eventually proved too much to bear. A leveraged private equity buyout, a rotating cast of CEOs, and a failure to keep up with savvy competitors have resulted in the company deciding to close hundreds of stores. 

But in chronicling the process of its downward spiral, my colleague Lila MacLellan learned about another critical business decision that helped hasten Joann’s demise: staffing cuts. 

Unlike grocery store customers who can reach for a can of soup or a head of lettuce with little fanfare, fabric store shoppers often need several pieces of cloth cut from different large bolts of fabric. Each must be unspooled, measured and folded—a laborious process, but also a highlight of the shopping experience. 

“Usually, while the cutting process is happening, there’s a conversation. ‘What are you making?’ ‘What else do you need to go with this?’” says Elizabeth Caven, an Ohio-based crafts business investor who is also a vendor at the company. Savvy sales clerks were often “one of the reasons why originally you would want to go into the store,” she says. 

When financial issues pushed the company to cut back on the number of store workers, it became much more difficult for shoppers to get their cloth in a timely manner, and wait times for fabric could stretch as long as 45 minutes. 

Companies in financial straits must often make difficult choices about where to cut costs. But staffing cuts in particular can often start a domino effect of other problems—especially in a customer-facing business. And investing in people would have helped Joann stay in the good graces of their patrons, according to  one former long-time executive.  

“There needed to be that point where Joann said: ‘Yes, we’re going to take it on the chin from a profitability standpoint for the next couple years, but it’s the only way we’re going to get our customer back,’” he said.  

You can read the whole story about what went wrong with Joann Fabrics here.

Azure Gilman
azure.gilman@fortune.com   

Around the Table

A round-up of the most important HR headlines.

Financial advisory firm PwC is launching a platform to help AI agents work better together. Business Insider

Trump signed an executive order ending collective bargaining rights for many federal union workers. New York Times

Sudden job loss can be detrimental, but for many public sector workers, those cuts an be devastating to their sense of identity. The Atlantic

Watercooler

Everything you need to know from Fortune.

Feeling hopeless. A new report found that many young Gen Z workers tend to give up on their careers before they even start. —Orianna Rosa Royle

High cost. With AI coaching getting better, corporate executives are starting to wonder if those more traditional private coaching experiences are worth the hefty price tag. —Lily Mae Lazarus

Pushing back on orders. A judge determined that organizations that receive contracts and grants from the government won’t have to certify that they’re following Trump’s anti-DEI agenda. —Claire Savage, Alexandra Olson, and The Associated Press