Fab.com Cuts More Than 100 Employees in Berlin in Strategy Shift

Whitewash Singlet on Fab.com | Source: Fab.com

BERLIN, Germany — Fab.com Inc., the online retailer recently valued at $1 billion, is cutting more than 100 employees in Berlin to concentrate its business in New York.

The company also asked more than 30 other employees in the Berlin office to move to New York, founder and Chief Executive Officer Jason Goldberg said today in a blog post. Fab is starting to sell the same products around the world, instead of having a separate European store, Goldberg told employees today in a separate memo obtained by Bloomberg.

Fab continues to shrink in Europe as it recalibrates its strategy after acquiring companies in Germany and the U.K. last year. It previously shut down the London operation and asked the employees to move to Berlin after discovering that it didn’t make sense to have two offices in the region.

“I’m very sorry for what I have to announce today,” Goldberg said in the memo today. “This decision is personally painful but strategically sound and, critically, not a result of any financial difficulties or a change in commitment to Berlin, Germany, the U.K., the broader EU or our overall growth.”

The company is changing the way it operates as it moves away from flash sales, offers with a time limit that are hard to operate on a large scale, Goldberg said in the note.

“Running a flash sales website is very different than running a global store,” he said. “When we were a flash sales website we essentially launched a new store every day. We all worked the long hours and we all felt like there was always more work to do than we could possibly handle.”

Fifteen employees are being asked to remain in Berlin, Goldberg said in the memo.

The company didn’t immediately respond to a request for comment. Fab raised $150 million last month from investors including China’s Tencent Holdings Ltd.

“We’ve been evaluating the best way to bring Fab to consumers in Asia,” Goldberg said in the blog post.

By: Sarah Frier; Editors: Crayton Harrison, Niamh Ring