The day of reckoning has come for Fab’s New York City office, where it is expected to have widespread layoffs due to yet another change in the company’s business model. The layoffs will affect about a third of the company’s global staff, but will be limited to New York staff.
After previously morphing from a social networking site to online flash sales, now the design-focused e-commerce site is betting that its new line of private-label and exclusive products will make for a more sustainable business over time. But that model isn’t as labor- or cost-intensive, from the perspective of sourcing and promoting various third-party goods, and so many of the people who worked those jobs are expected to be laid off.
TechCrunch first reported a new round layoffs were expected beginning two weeks ago, and company execs spent the intermediate weeks laying out a plan for its new business model. After a week of strategy meetings with his top brass, CEO Jason Goldberg was expected to propose the plan to the board for a vote today.
In an email, Fab told NY employees not to come into work during their usual hours, but that staffers would each have individual meetings set up. The company plans to lay off 80-90 employees in the NY office, which is a third of its global staff.
Fab released the following statement:
We are parting ways with incredibly talented individuals for whom we have only great respect and appreciation. Realigning our team is part of a broader business plan, which we began implementing last Fall and which will continue to unfold in weeks ahead.
We are seeing great success in our recent private label initiatives and customized furniture launches—and we are aligning our global team to support that direction. We have every confidence in our path ahead.