Wine sales site Lot18 laid off 25 employees today or 35% of its staff, AllThingsD reports. In the past year, the startup has downsized from 80-90 employees to a mere 46.While its previous layoffs coincided with sections of the site folding, this has more to do with a change in the entire business model.
Lot18 emerged in 2010 as a flash sales site for wine; now it’s repositioning itself as a subscription company like Direct Wines. Lot18 is hoping to add some predictability to its revenue stream by charging users either $99 for six bottles per month or $149 for 12 bottles.
Philip James, one of Lot18’s founders, will be leading the subscription business charge. Other executives are departing. Former VP of Product Andrew Koch recently left, AllThingsD points out, and chief counsel Barbara Anderson is also rumoured to be leaving. Four other executives left over the summer.
The move is also an effort to minimize Lot18’s burn rate. It spends a lot of money on user acquisition marketing campaigns, as well as on overhead to run the flash sales business.
“We need to resource according to our new business model and operate the existing business more efficiently with considerably less burn,” new CEO Jay Sung said in a statement.
It’s the first big decision he’s made since becoming CEO. Sung was promoted from his CMO position last month; before that, the startup was operating without a lead executive.
Times weren’t always tough for Lot18. The New York startup came out of the gates strong and ramped up to 500,000 users in a matter of months. It attracted $30 million from Accel Partners in November 2011 and was reportedly on track to generate multi-millions in its first year.