Fab.com Is Laying Off a Fifth of Its Workforce Today, 84 in NYC
Reuters reports that Fab.com will lay off "nearly a fifth of its workforce" starting today. The e-commerce company is cutting 101 jobs in total, including 84 people from its New York City headquarters. This is in addition to the 100 employees in Berlin that CEO Jason Goldberg laid off in July.
According to Reuters, this new round of layoffs are the e-commerce startup's attempt "to attain profitability by automating more of its business."
Fab.com has raised $336 million from powerful venture capital firms in rapid succession over the past three years, including another $15 million in two tranches the same time as its layoffs. The company is currently valued at $1 billion.
Back in 2012, when the Wall Street Journal wondered whether "Are Flash Sales Still 'Fab'ulous?" it seemed unclear how the metastasizing company would escape the same fate at Gilt Groupe, which also had a big round of layoffs. A bunch of cheerleading blog posts touting vanity metrics and rapid expansion later, and it seems like not that much has changed.
In a post about the layoffs, Goldberg has the chutzpah to remind everyone that Fab.com is hiring:
In total the layoffs affect 101 people worldwide, including 84 people from our New York headquarters. Following these actions Fab will have 440 full time employees. As noted, not every group at Fab will be impacted. In particular, our Crackerjack customer service team, our merchandize planning, and our technology groups will remain fully in place. We are also hiring people for our private label sourcing team in New York and to grow our 50-person Fab Designed By You (Fab DBY) custom-furniture group that continues to operate out of our Berlin office.
I acknowledge that sometimes our near-term decisions may not always make immediate sense externally. This is not one of those times. The impetus behind this decision is our plan to accelerate Fab’s path to profitability. We are certain that driving towards a profitable Fab in the near-term is the way to build the best Fab for the long-term benefit of our customers.
An earlier version of our post stated that Goldberg linked readers to his previous layoff memo in today's announcement. He actually directed readers to a recent memo about "sustainable profitability."
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