NEW YORK, United States — Fab.com Inc., the e-commerce startup valued at about $1 billion in a June fundraising round, plans to cut 101 people, or about 19 percent of its staff, as it seeks to turn a profit.
“Fab is focused on being profitable and self-sustainable as soon as possible,” Chief Executive Officer Jason Goldberg said today in a blog post. “That scenario is well within our reach with our existing financing if we follow an extremely thoughtful and disciplined path to profitability.”
The reduction, which includes 84 people in Fab’s New York headquarters, will leave the company with 440 full-time employees. The cuts will save New York-based Fab.com a “significant amount,” getting it closer to a goal to start turning a profit without seeking more financing, the company said in an e-mail.
The two-year-old startup, which rose to prominence selling quirky home goods, such as vintage typewriters and tables shaped like U.S. states, raised $150 million in June from investors such as China’s Tencent Holdings Ltd. The deal valued the retailer at about $1 billion. Additional funding rounds in July and August brought the total amount raised to at least $325 million.
As it has grown, Fab has struggled with selling its highly curated merchandise on a global scale. Earlier this year, the company shifted from a site specializing in flash sales — selling limited amounts of merchandise in bursts — to an inventory-based system. In July, the company eliminated 100 jobs in Berlin and moved 30 workers from the German office to New York. It said in August that no additional job cuts were in the works.
“During the last few weeks, and a ton of thoughtful analysis, meetings, discussions with executive management and the board, we made this decision to structure our company in a way that accelerated our path to profitability,” the company said.
By Sarah Frier; Editors: Nick Turner, Crayton Harrison