Two days after receiving $27 million in private funding, Furniture.com today laid off 80 of its 195 employees, slashing its work force by 41 percent, sources told CNET News.com.
Analyst Jeff Quinn, with research group Gomez, said Furniture.com notified him of the layoffs today, saying the cutbacks were part of the company's plan to reach profitability. An employee at Furniture.com who was not laid off said the company announced the layoffs to the remaining staff this afternoon.
Executives at the company did not return phone calls this morning.
This is the second round of layoffs for Furniture.com in the past two months. In April, the company laid off 29 employees, or about 12 percent of its work force.
On Monday, the Framingham, Mass.-based company announced it had withdrawn plans for an initial public offering. The company filed for an IPO in January and said at the time that it hoped to raise $50 million.
CMGI, which already owned 17 percent of Furniture.com, led the group of investors in Furniture.com.
In recent months, Internet companies have been running low on cash, forcing some to trim their staffs or even shut down. This month alone, EMusic, Salon.com and PlanetRx.com have laid off workers.
In the home
furnishings sector, Furniture.com rival Living.com last month laid off 50 employees, or about 13 percent of its work force.
Quinn said that although layoffs are traumatic for young companies, he praised the two-year-old company's executive staff for focusing on the
"I think they had too much growth over the past year," Quinn said. "They were trying to grow through acquisition, and it wasn't a focused growth. This will allow them to concentrate on growing at a slower rate until they are ready to go through with their public offering."
Another way Furniture.com plans to increase efficiency is to scale back the number of manufacturers the company receives goods from, Quinn said. Fewer suppliers should simplify distribution for Furniture.com and lead to better on-time delivery, which in turn, makes for happier customers, he said.