Fab.com Lays Off Over 100 Employees in Europe

Posted Jul 30, 2013

Fab.com has laid off over 100 employees at their headquarters in Berlin.  The layoffs is because the company is shifting away from a flash sales business model.  The company is starting to hold their own inventory and will be operating as a global storefront.  Fab.com recently raised $150 million in Series D funding.  The layoffs affected 15% of their 696 employees, according to AllThingsD.

Around 70 employees will be laid off immediately and the remainder will be asked to stay on for a few months during the transition period.  Around 36 employees will be asked to relocate to New York from Berlin.  Fab.com CEO said that this action is a way to eliminate duplicate positions.  Fab.com was operating two separate flash sales companies, one in Europe and one in the United States.

?Just the nature of the flash-sale business is that basically every single day you?re opening a new store with hundreds if not thousands of products,? stated Goldberg in an interview with AllThingsD. ?Because of that, we had to replicate the exact same operation in Europe. But the best stores buy once, sell everywhere or make once, sell everywhere. Our aspiration is to be an amazing global store and, so, we need to start operating as a global store.?

Fab.com will continue to sell to Europe and source products from there.  Fab.com will maintain a customer service team in Berlin along with finance, HR, and IT employees.

Fab.com is hiring for over 70 open positions.  Investors in the Series D round knew of the potential for layoffs.