“Failing Gracefully” is nothing new in the startup world. While some startups come to a quick and definite stop, and then disappear off the face of the earth, others return money to investors, and wind down their companies. That, is what some consider “failing gracefully”.
Over the summer design focused e-commerce company Fab closed a $150m funding round at a valuation of $1B and reported they were raising another $100M more. In total the company has raised $336 million dollars in venture funding.
While most would think that with this kind of venture backing employee headcount would increase not decrease, that isn’t the case at Fab. The company’s CEO Jason Goldberg confirmed earlier this month that they would be laying off 101 employees, most within their New York headquarters. After the layoffs they plan on hiring 50 new employees to focus on their new private line.
While that may seem harsh to some, Goldberg also revealed that during this reorganization period he would not be drawing a salary. Business Insider reports that these layoffs were not new and had been anticipated for months as the company dealt with reducing their burn rate (the rate at which they are spending money). The layoffs amounted to 15% of their 700 person work force.
As for laying off gracefully, in addition to not taking a salary and being transparent with his workforce Goldberg and other Fab executive’s reached out with clients, partners and other startups to organize a job fair for the 85 folks laid off from the New York office.
Business Insider reported on Friday that 84 of the 85 laid off employees showed up for the job fair. The 85th was on a pre-planned vacation.
40 top named companies including: Google, One Kings Lane, Birchbox, Gilt Groupe, Quirky, Conde Nast, OpenSky, West Elm, Warby Parker and Thrillist all came out to recruit Fab’s laid off developers, designers and business development folks. Before the exhibit style job fair kicked off Fab brought in resume consultants and interview coaches to work with the 84 laid off employees.
20 of the companies reported that they would be holding interviews with potential candidates.
photo credit: Business Insider.