At Fab, they used to joke about being fired. “
If you have time to xyz, you have time to get fired,” was the in-office zinger, according to CEO Jason Goldberg. He once also joked that
any employee who failed to upload a headshot to the company’s employee web pagewould lose their job.
Today, Fab’s remaining 440 employees go back to work after two rounds of layoffs that have cut their numbers down from 600. The latest round of job cuts came last week, when 101 workers got the ax.
Last week, the remaining staffers were called into meetings to describe how and why the company is having such a wrenching time on its “path to profitability.” Goldberg told employees to take the weekend to replenish themselves, and this morning will see the start of some seminars for staffers on Fab’s finances.
Those meetings may answer some awkward questions about Fab’s business, which has raised $US165 million in new investment this year alone, for a total of $US336 million in all venture funding.
That show of confidence from investors came despite the company missing its revenue targets this summer. Goldberg had previously said Fab was meeting its targets. A recent blog post admits the company is not profitable. We asked the company about its revenues — in addition to all the other news it’s generating right now — and a spokesperson said the CEO’s blog and letter to staff were the best comment they had.
The company also has a high cash “burn rate,” as any firm with 440 staff would. The company seems to be in the process of its second “pivot,” or strategic change of direction. It started as a gay community site before moving into flash sales. Now, it seems, flash sales were a poor model and Fab is moving more toward traditional e-commerce, where the company holds goods for a period of time.
Offsetting that burn rate is the news that Goldberg and CTO Nishith Shah will forfeit their 2014 salaries. It’s not clear whether co-founder Bradford Shellhammer will do the same. All ThingsD suggests the move is intended as a morale booster.
Whether it will be enough to create “Smiles. Guaranteed.,” the tagline the company adopted in August, is another question entirely.