Fab lays off more than 100 staff from its Berlin office as it pivots its business model

Jason Goldberg

Just over a year after launching in Berlin and a month after raising a $150m Series D round comes unexpected news from eCommerce site Fab. In a blog post, Fab founder Jason Goldberg announced that they are laying off more than 100 employees from the company's European headquarters in Berlin.

Jason Goldberg

The layoffs are a result of the company's move away from its original business model of flash sales to focus on building a huge online store which holds its own inventory.

Goldberg claims that the changes mean that it makes sense for the company to centralise its operations in its New York headquarters to improve efficiency. By the end of 2013, more than 100 employees are set to be laid off – representing 15 per cent of Fab's almost 700 employees globally. More than 30 Berlin employees have been invited to move to the New York office.

Goldberg claims that hosting flash sales proved to be too complicated and not scalable enough for the company. The flash sales model also meant Fab had two large teams, one in the US and one in Europe, resulting in many duplicated positions. The pivot means Fab can now make or buy products once and sell them globally, running the majority of these operations from New York.

The company will have its core merchandising, marketing and operations teams in New York. Fab will keep some European departments in Berlin, including local customer service, returns, shipping and logistics, finance, IT and HR, plus staff for its customised furniture offers.

Fab made the move to Europe in early 2012 by taking over Berlin's Casacanda and later London’s Llustre and German bespoke furniture company Massivkonzept. The company is currently building a bricks-and-mortar store in Hamburg, which will be its first offline retail store.

Fab's former Chief European Officer, Maria Molland, left the company a few months ago. She was unavailable to comment on the layoffs but in an interview earlier this year she pointed to a positive expansion path in Europe:

"We’re on an unbelievable run-rate and this year Europe makes up about 35 per cent of the business… we’re ramping up significantly."

[contentad keyword= "left"] While this move implies less of a focus on European markets, Goldberg writes that this is not the case, saying "Fab remains 100 per cent committed to the European market and the Fab Berlin office will continue to support our growing EU presence with a more tightly focused team in place".

Despite the redundancies, Goldberg says the company is seeking to fill 70 positions globally – he wants to double the engineering team and hire in the sourcing and planning departments.

For related posts, check out

“Amazon with soul” Fab raises $150m Series D
Fab ditches flash sales, acquires Germany’s Massivkonzept – and reveals first retail store in Hamburg
Fab ditches flash sales, acquires Germany’s Massivkonzept – and reveals first retail store in Hamburg

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