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After layoffs, Fab CEO Goldberg declines 2014 salary

The online retailer has shed 250 people, or 37% of its workforce, since July

Financial trends and news by Steven Loeb
October 7, 2013 | Comments
Short URL: http://vator.tv/n/3268

(Updated to reflect comment from Fab)

For workers at online retailer Fab, these last few months must have been excruciating. Over 250 employees at the company were axed in two rounds of layoffs, as Fab has been consolidating and moving away from flash sales and towards a more efficient inventory-planning model. 

Fab CEO Jason Goldberg seems to recognize the pall that these cuts must have put over the remaining employees as the company, and has now decided to do something that he hopes will make it go down easier: he is going to give up his entire 2014 salary, it has been confirmed to VatorNews.

CTO Nishith Shah has also reportedly decided to do the same, according to AllThingsD, who first reported this news on Monday. Fab declined to confirm this news, however. 

While this is no doubt a gesture of good faith, there might also be another motivation behind it: another way for the company to save some money in the short term. 

VatorNews has reached out to Fab to confirm these reports, and we will update as soon as we learn more.

The first round of layoffs came at the end of July, when the company fired over 100 people in its Berlin office. The positions going up for the ax included those in merchandising, operations, and marketing as Fab consolidated those areas in its New York location. 

Just last week, Fab got rid of another 101 people, including 84 members of its New York team, to go down to 440 full time employees. It started out with 696 employees before these cuts began, meaning it has shed roughly 37% of its workforce. 

"Fab is investing tens of millions of dollars in developing and acquiring fresh merchandise for our customers at amazing prices, backed by our smile guarantee.  To pay for that, while accelerating our path to profitability, we’ve made the tough but correct decision to eliminate positions that are either legacies of our former flash-sales business model or are part of current processes that can be managed with innovative technology and fewer people," Goldberg wrote in a blogpost explaining the most recent layoffs."

"The impetus behind this decision is our plan to accelerate Fab’s path to profitability. We are certain that driving towards a profitable Fab in the near-term is the way to build the best Fab for the long-term benefit of our customers."

All of this comes at a time when Fab is changing its business model, and narrowing its product offerings, according to AllThingsD. The company currently lists 10 product categories, but it will stop selling products in three of them: vintage, food and pets.

Fab has raised a total of $310 million to date, including a $150 million Series D in June, at a pre-money valuation of $1 billion.

With more than 14 million members across 26 countries, Fab sales increased by 500% in 2012 and are expected to grow by another 100% in 2013,

(Image source: http://anatomyofadinnerparty.com)


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