7. August 2013–
New details revealed in an internal memo from Fab.com CEO Jason Goldberg put the Berlin office layoffs at more than first reported, with over 150 employees facing the axe – and just 50 concrete positions remaining in the German capital. But in true Fab style soon-to-be-ex-staff are being invited to a Jobs Fair at the HQ today.
The memo, published yesterday on Bloomberg sees Goldberg state to his European staff that only 15 of the current 230 personnel will remain at permanent staff positions within Fab in Berlin, with a further 35 positions opening up at Fab DBY, the new venture in customisable furniture, launched after its acquisition of Hamburg-based Massivkonzept.
Thirty six of the staff have been offered positions at Fab's New York HQ, while “a handful” have been offered positions in Eindhoven where Fab handles its European logistics.
From “Summer of Love” to swift cuts
After a period of rapid expansion into Europe – purchasing Berlin-based sales site Casacanda in 2012 to make Berlin its European HQ and UK flash sales site Llustre later in the year – the company rapidly expanded to its current staffing level, hiring US hotshot Maria Molland to become Chief European Officer.
A recent move into roomier premies in Rungerstrasse in July, plus an staff initiative of a “Summer of Love” made Goldberg's latest pivot all the more confusing and unexpected to its European team, with one source close to the situation describing it as “a shitstorm”.
Goldberg explained the pivot in his memo, saying:
“When we were a flash sales website we essentially launched a new store every day – and a different one in Europe than in the US. Each day we added hundreds if not thousands of new products to the store, mostly locally sourced. It took a lot of people and a ton of effort. We all worked the long hours and we all felt like there was always more work to do than we could possibly handle. And then each day the store turned over, again and again and again.
The best global stores don’t operate like that.
The way that stores operate and scale globally is to sell the same stuff everywhere. Make once, sell everywhere. Buy once, sell everywhere. That’s what Ikea does. That’s what Urban Outfitters does. That’s what ASOS does.
That’s what Fab needs to do.
We have decided to centralise much of our global operations, mainly merchandising, marketing, and operations, at our New York headquarters."
A source close to the situation told us: “While the move made complete sense, it perhaps could have been communicated better. But it means that Fab will be close to profitability in the next couple of months in Europe.”
He also added that the remaining staff would stay for now in the Rungerstrasse premises, with the extra space being rented out to other companies. Molland is unavailable for comment and is said to be taking a world trip.
A Jobs Fair for the layoffs
The memo, dated 30 July, goes on to say that for some Fab Europe staff that would be their last day, with others offered the chance to work a few more months with the company.
[contentad keyword= "left"] All were invited to apply for the openings at Fab DBY, and, in a typically Fab-like move, the company is hosting a jobs fair at its Berlin premises today (7 August), with over 35 Berlin businesses invited to attend to snap up some of the international talent that Fab has attracted to the city.
Goldberg was keen to keep the message positive, pointing to Fab's recent $150m finance round as proof that financial difficulties were not driving this move: “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 UK, the broader EU or our overall growth...
Fab closed $150m in financing a few weeks ago – the largest single venture capital investment round in the world in the second quarter of 2013. We’re doing this because simply it’s smart business."