Some 80 jobs out of a total of 315 in Italy are to go, the firm said, blaming changing consumer habits and falling demand, especially in its home market.
Alessi's worldwide staff is 360.
The family business, which has used some of the world's top designers including Philippe Starck and Ettore Sottsass, saw sales plummet to around 60 million euros in 2018 from 86 million in 2010.
The group, based in Crusinallo di Omegna in the north of the country, said it had to cut staff to provide “a future” to the company and its role for Italian design.
There were no plans to move any production out of the country, it said.
Alessi said it will now work on new sales channels, especially online, and try to strengthen its international presence, especially in Asia and the Middle East.
It said it would also streamline its product portfolio.
Alessi was hit by the impact on consumer spending of a severe Italian recession in 2012-2013.
After several years of tepid growth, the country slipped into recession again at the end of last year, while growth in the rest of the eurozone was also slowing.
Alessi said it was now looking for an investor willing to inject funds into the family business to help it recover.
In an interview with Italian paper La Stampa, company chief Albert Alessi said he was in talks with a British company which he said is present both in finance and industry.