Fab cuts another 100 jobs following layoffs in Berlin

Nina Fowler 2013-10-04 8

jason goldberg

Online design shop Fab is laying off another 100 employees as part of a push to turn a profit before it runs through its existing venture capital funding. 

On Thursday, Fab CEO Jason Goldberg published a memo to employees about the layoffs on his blog, Betashop. The job cuts will hit 101 people worldwide, with 84 of those in Fab’s New York headquarters. The decision follows the loss of at least 150 jobs in Berlin in July.

Fab is in the middle of a challenging pivot from flash-sales website to online shop – and one that, according to Danielle Sacks’ in-depth profile for Fast Company, makes about 30 per cent of its revenue from goods it manufactures itself. To top it off, Fab has just introduced a free returns, free shipping and price-match policy.

To help pay for the shift, the company has decided to cut jobs not relevant to the new business model or part of processes that can be automated. 

Fab will be left with about 440 full-time employees. The customer service, merchandise planning and technology teams will remain intact with new hires expected for private label sourcing in New York and at the 50-person Fab DBY custom-furniture group in Berlin.

In a letter to employees in September, Goldberg said Fab had enjoyed a “rocket-like path of growth” over the last two years. “While exhilarating, that type of growth can only last on its own for so long. At some point, the rocket reaches an apex and either begins to fall or with intelligent guidance continues on an upwards trajectory. We’re aiming for the stars.”

As part of the strategy refresh, the executive team and board have decided to try to reach profitability without raising additional funding. The company last raised a $150m round led by China’s Tencent Holdings in June 2013, supplemented by an extra $5m from Japan’s ITOCHU Corporation in August.

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