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Gilt Groupe will be laying off 50 or 60 people within the next week or so, a source close to the company confirms.Betabeat first reported the rumour at a higher number, up to 170 employees, this morning.
The source says 5-6% of the company will be let go in a number of its departments so the company can get to cash-flow break-even by the second quarter of this year.
The move is the result of a new focus on efficiency and profitability. Previously, the company has emphasised growth–a strategy that allowed it to amass $500+ million in revenue and a $1+ billion valuation in only a few years.
Our source explained that it takes more people to set up new departments than it does to keep them running. Now that Gilt has established a number of businesses, like Park & Bond and Gilt Man, the hard work is complete. Also, the recently-acquired BuyWithMe has now been fully incorporated with Gilt City, Gilt’s high-end Groupon-like coupon business; that business can now be sustained with fewer people.
Even though Gilt is planning layoffs in some areas, it will continue to hire. Gilt will end this quarter with more employees than it started with, says the source.
Disclosure: Gilt Groupe’s CEO and founder, Kevin Ryan, is also the chairman of Business Insider.