Fab to cut more than 100 jobs, 15 percent of site's workforce

The design e-commerce site says the cuts are due to its recent decision to transition away from its flash-sale business model.

Fab.com Screenshot by CNET

Fab's latest makeover apparently includes a slimming of its workforce.

The design e-commerce site, which sells furniture, clothes, and decor, plans to lay off more than 100 people from its Berlin headquarters, or about 15 percent of its global workforce. The company said in a blog post that the cuts were necessary as it transitions away from its flash-sale business model.

The staffing reductions come a little more than a month after the online retailer closed a $150 million investment round , giving it a $1 billion valuation. The company said with the investment round, led by Chinese Internet site Tencent Holdings, it identified redundancies in its operations as it focuses on expansion in Asia.

"Up until now Fab essentially ran two separate flash-sales businesses, one in the U.S. and another in Europe," the company said in a blog post Tuesday. "There is a high percentage of supplier and SKU [stock-keeping unit] overlap between the two regions, but the nature of flash sales coming and going daily required us to build up large teams in both locations doing much of the same thing."

As part of its reorganization, the company said it's asking more than 30 employees in its Berlin office to relocate to New York. Job cuts aside, the company insists it's continuing to grow and plans to add more than 70 positions worldwide.

Fab.com started as a social network for the gay community but became a design-focused, flash-sale site in 2011, quickly picking up millions of members along the way. However, the site announced in mid-July that it was ditching the flash-sales model for a "following" feature that personalizes what customers see on the site and what products are pushed to them. The new strategy is in line with its roots in social networks, which still drive a ton of its traffic and set the site apart from Amazon.

The e-commerce site announced last December that it had secured a " seven-figure investment " from Times Internet, the digital arm of the Times of India Group, in a partnership between the two companies "to explore and execute on our India market strategy in the coming years." Fab had previously raised more than $150 million from Andreessen Horowitz, Menlo Ventures, First Round Capital, Atomico, and SoftTech VC.

 

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