How Did Fab Raise $150 Million While Firing Over 200 Workers…All In Two Months?


According to Reuters, “emotional commerce” site Fab will be laying off 101 workers worldwide.

The move follows an odd pattern for Fab, which also laid off over 100 people in July while simultaneously raising a $160 million funding round that values the company at over $1 billion. CEO Jason Goldberg says the layoffs 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 isn’t known for being a sympathetic boss — a Bloomberg investigative piece in June revealed 11 executives have quit in the past year, with Goldberg routinely issuing layoff threats to ensure employees follow company decorum (“If you have time to model, you have time to get fired,” read one company-wide e-mail from COO Bradford Shellhammer).

Fab has almost unequivocally scaled too fast, as even Goldberg admitted that spending 35% of the company’s 2012 revenue on marketing was a mistake. This latest round of cuts — amounting to about 20% of Fab’s workforce — could be a sign of deeper issues at play.