In order to centralize its operations at their headquarters in New York, Fab has plans to let go of 100 of its employees working at its Berlin office by the end of this year. This news was broken by the founder of Fab, Jason Goldberg, himself through a blog post in which he sadly said goodbye to 100 of his 700 employees. Goldberg also wrote in the post that it was a very “tough day for Fab” and the skilful employees of the startup. However, he noted that tough decisions are taken because they make people strong. Here are few excerpts from the original post from Goldberg in which he had explained the reason for firing the workers and also given some context as well:
“They say it’s the tough decisions that make us stronger.
Today is a tough day for Fab and our amazingly talented and hard working team as we are putting into effect a considered initiative to centralize much of our operations at our New York headquarters. While the resultant efficiencies will add immense value to our growing global customer base, this change will also eliminate more than 100 positions in our Berlin office due to redundancies by the end of 2013.
Fab remains 100% committed to the European market and the Fab Berlin office will continue to support our growing EU presence with a more tightly focused team in place. Fab’s European customers will not see any disruption in service. This is a strategic business decision, endorsed by our investors with whom we discussed this possibility, but that doesn’t obviate the sadness we feel in saying good-bye to the many people who helped put Fab on the amazing path we are on today.
Some context:
Earlier this year Fab announced that we are pivoting our business model from our roots in flash sales to being a comprehensive online lifestyle shop. Over the past couple of years we realized that in order to exceed the expectations of our customers — including fast, free shipping and free returns on a great assortment of the most exciting lifestyle products in the world – that we would need to shift our business model to an inventory planning model. We are still working our way through that shift.
This evolution of our business model is key to our executing on our mission to be the place where people around the world discover the most exciting things in their lives. We are building a scalable model that allows us to sell the same products simultaneously everywhere around the globe while giving our customers complete confidence in their purchases. That was hard to do with flash sales as products would come and go from Fab daily; the nature of flash sales dictates that products are not kept in inventory and are thus very difficult to ship fast or for free.
However, fast and free shipping is possible with an inventory-planning model. We’ve been working towards that, focusing on buying and making Fab products that are unique and special and that we can sell everywhere, again and again and again.”
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