6 ms·

Fab Lays Off One-Third of Global Headcount, Slashing New York City Staff

68 points by ILIKEPONIES 12y ago

jtchang 12y ago
Competition has really heated up since the last time I checked out Fab. It strikes me that this news is the first time I've heard about what Fab was up to in a long time. I can't really think of anything that would make me go "oh...let me go check out fab.com and see if they have it". This is unlike groupon which seems to have spent an ungodly amount of money (in a good way) in marketing and positioning.
- kosei 12y ago
  Always seemed to me that Fab should have spent their money on marketing and positioning, trying to put themselves as a major internet retailer for fashion and modern, high-end living. Instead it appears that they went out of sight, out of mind for many.
  - billmalarky 12y ago
    Most of Fab's growth was actually driven by high spending on marketing and positioning. http://www.entrepreneur.com/article/230081 http://www.entrepreneur.com/article/230081 Search for "what went wrong"
  - ForHackernews 12y ago
    This is literally the first time I've ever heard of this company.
- bstar77 12y ago
  I see some of their stuff in target, they have a little section at the store near me. The products generally seem useful and well made and reasonably priced.
hkmurakami 12y ago
Totally thought this was a semiconductor fab layoff and was utterly perplexed by the NYC location. "Fabulous" makes more sense.
- dbcooper 12y ago
  As did I. I was getting very worried about the next two nodes from IBM and Global Foundries. ;-)
  - hkmurakami 12y ago
    Yup, totally thought that this was an IBM related thing, and that the "C" part of NYC was a typo!
- megablast 12y ago
  Oh exactly, not sure why we should care about an ecommerce site with layoffs, as opposed to the 100s of other companies with layoffs. Including HP laying off 16,000.
  - hkmurakami 12y ago
    omg is that a recent development? Which departments are affected? (PC business I presume)
    - eitally 12y ago
      http://recode.net/2014/05/22/hp-shares-slip-as-q2-sales-come-in-slightly-below-expectations/ http://recode.net/2014/05/22/hp-shares-slip-as-q2-sales-come...
scottfr 12y ago
Remember the CEO's idiotic (and apparently now deleted) blog post: "It's a fucking startup, why are you here" [1]. I guess 1/3 of the staff couldn't come up with a good enough answer. It's a shame they're the one's getting axed and not the CEO. [1] http://www.fastcompany.com/3029439/most-innovative-companies/fab-ceo-sent-this-terrifying-memo-in-a-bizarre-attempt-to-rally-hi http://www.fastcompany.com/3029439/most-innovative-companies...
- confluence 12y ago
  > why are you here To get fucking fired by incompetent blowhards apparently. That appears to be the norm with most startups, and companies for that matter. Sad state of affairs.
- adventured 12y ago
  Management demolishes $300 million in venture capital, employees get axed instead.
  - jpatokal 12y ago
    Most of that $300 million was spent on salaries for employees.
    - nerfhammer 12y ago
      How much of it was spent on salaries for managers?
      - tptacek 12y ago
        If most of the employees are technical, and the company is run like a typical tech company (ie, with too much middle management, but not headcount literally dominated by them), then line employee headcount costs likely dwarf those of management. That is one reason why executive compensation can get so outrageous; if you have a lot of employees, most singular expenses become rounding errors.
    - 12y ago
mtgentry 12y ago
As someone who sold on Fab in the past, I wish them the best. They always treated their vendors well and their operations team was top notch. Hopefully they'll figure it out.
aresant 12y ago
I bought some stuff around Christmas and then got spammed out of love with them. I had no idea that they had made another pivot from the flash-sales site I signed up for. Checking out their current homepage and seeing them "reimaging" sofas as their new business does not give me a lot of faith that they're going to have a happy ending.
- goatforce5 12y ago
  Before they were a flash sales site, they were a gay social network: http://www.fastcompany.com/1835757/fabcom-ready-set-reset http://www.fastcompany.com/1835757/fabcom-ready-set-reset
clamprecht 12y ago
Anyone remember Jobster.com? Same CEO as Fab.com now.
ChrisNorstrom 12y ago
EDIT: Experience with Fab is based on December 2012 - March 2013. When I sold through them as a vendor I remember Fab being extremely inefficient in nearly everything they did. I had to email a good 3-5 people to get anything done because nothing was automated. From shipments to payments to setting up the sale to uploading media and printing out orders and postage. Everything was done manually by emailing someone and yes there were mistakes. I had to use excel, save the file they emailed, and email it back to them just to set up a proposal for a sale. Yes, Microsoft Excel. And they sent any type of instructions in PDF formats. They also used some really expensive shipping options even though I had cheaper alternatives and was doing fulfillment myself. I had to manually sign up for a UPS account and get approved to have them charged and all sorts of nonsense. They also wanted me to set up a UPS pick up ($8) every day. With their margins I just don't understand how they made money. Apparently they weren't which is why things got bad. And their marketing was just such a waste at times. They'd mail a 3 sided folded postcard on extremely thick paper with only 3 random items on it (that weren't even interesting) and their "Fab, Smile, you're designed to" logo. They did a terrible job advertising and it all lacked thoughtfulness. Their in-house fulfillment team used custom boxes that were printed in all BLACK ink and on top of that had printing on the inside with their logos and catch phrase on the inside and out. I have never in my life seen shipping boxes that expensive used to ship an item. EDIT: I'm not saying they weren't nice to work with, they were all extremely pleasant, just the system of doing things was very inefficient. Rather than emailing me so many different forms and PDF instructions they could have linked to them on the FAB control panel. It's the CEOs job of ensuring the systems a business uses are efficient and it seems that's what destroyed them. Wasting money.
- arbuge 12y ago
  When did you do business with them? Early days or more recently? Curious because that seems at odds with the experience of at least 1 other vendor posting in these comments...
- hagbardgroup 12y ago
  This reflects what I have read elsewhere. What they would do is bid wastefully using weak creative and little targeting as if they were actively trying to waste as much money as possible (which may have been what they were doing).
iamleppert 12y ago
Enough moves like this and nobody is going to want to work for this company. Enough moves like this and the CEO (Jason), a huge pre-madonna and drama queen, is going to have a tough time getting money from investors for his next "venture". Kudos for him for trying, but he certainly strikes me as a CEO I wouldn't want to work for.
- md224 12y ago
  Just a quick note -- and don't feel bad, this is a common mistake -- the phrase is actually "prima donna", not "pre-madonna".
  - ultimatedelman 12y ago
    gentlest grammar correction i have ever seen on the internet. bravo!
  - twic 12y ago
    Perhaps he really was comparing Mr Goldberg to a young Mary of Nazareth? I confess that the point of such an analogy eludes me. Something to do with carpentry?
    - md224 12y ago
      Not sure if you're just being snarky, but I would assume people who write "pre-Madonna" are under the impression it's a reference to the pop star (which sort of makes sense).
      - mrev19 12y ago
        how language evolves
      - ForHackernews 12y ago
        It's an excellent eggcorn, at any rate: https://en.wikipedia.org/wiki/Eggcorn https://en.wikipedia.org/wiki/Eggcorn
  - 12y ago
abraham_s 12y ago
The CEO was in news for being mad at someone who didn't switch seats with him on a plane. http://www.businessinsider.com/fabcom-founder-baffled-by-passenger-who-declined-100-to-switch-seats-with-him-on-plane-2013-7 http://www.businessinsider.com/fabcom-founder-baffled-by-pas...
amac 12y ago
The private label strategy, though appearing as a last resort, does make some sense i.e gross margins improvement. I think this serves as a lesson to those folks operating with primarily or even just operating partly in ecommerce. That is, if you're selling other people's stuff it's an efficiency play whilst if you're selling your own stuff, you've got more room to maneuver with margin.

68 points by ILIKEPONIES 12y ago

Competition has really heated up since the last time I checked out Fab. It strikes me that this news is the first time I've heard about what Fab was up to in a long time. I can't really think of anything that would make me go "oh...let me go check out fab.com and see if they have it". This is unlike groupon which seems to have spent an ungodly amount of money (in a good way) in marketing and positioning.

kosei 12y ago
Always seemed to me that Fab should have spent their money on marketing and positioning, trying to put themselves as a major internet retailer for fashion and modern, high-end living. Instead it appears that they went out of sight, out of mind for many.
- billmalarky 12y ago
  Most of Fab's growth was actually driven by high spending on marketing and positioning. http://www.entrepreneur.com/article/230081 http://www.entrepreneur.com/article/230081 Search for "what went wrong"
- ForHackernews 12y ago
  This is literally the first time I've ever heard of this company.
bstar77 12y ago
I see some of their stuff in target, they have a little section at the store near me. The products generally seem useful and well made and reasonably priced.

hkmurakami 12y ago

Totally thought this was a semiconductor fab layoff and was utterly perplexed by the NYC location. "Fabulous" makes more sense.

dbcooper 12y ago
As did I. I was getting very worried about the next two nodes from IBM and Global Foundries. ;-)
- hkmurakami 12y ago
  Yup, totally thought that this was an IBM related thing, and that the "C" part of NYC was a typo!
megablast 12y ago
Oh exactly, not sure why we should care about an ecommerce site with layoffs, as opposed to the 100s of other companies with layoffs. Including HP laying off 16,000.
- hkmurakami 12y ago
  omg is that a recent development? Which departments are affected? (PC business I presume)
  - eitally 12y ago
    http://recode.net/2014/05/22/hp-shares-slip-as-q2-sales-come-in-slightly-below-expectations/ http://recode.net/2014/05/22/hp-shares-slip-as-q2-sales-come...

scottfr 12y ago

Remember the CEO's idiotic (and apparently now deleted) blog post: "It's a fucking startup, why are you here" [1]. I guess 1/3 of the staff couldn't come up with a good enough answer. It's a shame they're the one's getting axed and not the CEO. [1] http://www.fastcompany.com/3029439/most-innovative-companies/fab-ceo-sent-this-terrifying-memo-in-a-bizarre-attempt-to-rally-hi http://www.fastcompany.com/3029439/most-innovative-companies...

confluence 12y ago
> why are you here To get fucking fired by incompetent blowhards apparently. That appears to be the norm with most startups, and companies for that matter. Sad state of affairs.
adventured 12y ago
Management demolishes $300 million in venture capital, employees get axed instead.
- jpatokal 12y ago
  Most of that $300 million was spent on salaries for employees.
  - nerfhammer 12y ago
    How much of it was spent on salaries for managers?
    - tptacek 12y ago
      If most of the employees are technical, and the company is run like a typical tech company (ie, with too much middle management, but not headcount literally dominated by them), then line employee headcount costs likely dwarf those of management. That is one reason why executive compensation can get so outrageous; if you have a lot of employees, most singular expenses become rounding errors.
  - 12y ago

mtgentry 12y ago

As someone who sold on Fab in the past, I wish them the best. They always treated their vendors well and their operations team was top notch. Hopefully they'll figure it out.

aresant 12y ago

I bought some stuff around Christmas and then got spammed out of love with them. I had no idea that they had made another pivot from the flash-sales site I signed up for. Checking out their current homepage and seeing them "reimaging" sofas as their new business does not give me a lot of faith that they're going to have a happy ending.

goatforce5 12y ago
Before they were a flash sales site, they were a gay social network: http://www.fastcompany.com/1835757/fabcom-ready-set-reset http://www.fastcompany.com/1835757/fabcom-ready-set-reset

clamprecht 12y ago

Anyone remember Jobster.com? Same CEO as Fab.com now.

ChrisNorstrom 12y ago

EDIT: Experience with Fab is based on December 2012 - March 2013. When I sold through them as a vendor I remember Fab being extremely inefficient in nearly everything they did. I had to email a good 3-5 people to get anything done because nothing was automated. From shipments to payments to setting up the sale to uploading media and printing out orders and postage. Everything was done manually by emailing someone and yes there were mistakes. I had to use excel, save the file they emailed, and email it back to them just to set up a proposal for a sale. Yes, Microsoft Excel. And they sent any type of instructions in PDF formats. They also used some really expensive shipping options even though I had cheaper alternatives and was doing fulfillment myself. I had to manually sign up for a UPS account and get approved to have them charged and all sorts of nonsense. They also wanted me to set up a UPS pick up ($8) every day. With their margins I just don't understand how they made money. Apparently they weren't which is why things got bad. And their marketing was just such a waste at times. They'd mail a 3 sided folded postcard on extremely thick paper with only 3 random items on it (that weren't even interesting) and their "Fab, Smile, you're designed to" logo. They did a terrible job advertising and it all lacked thoughtfulness. Their in-house fulfillment team used custom boxes that were printed in all BLACK ink and on top of that had printing on the inside with their logos and catch phrase on the inside and out. I have never in my life seen shipping boxes that expensive used to ship an item. EDIT: I'm not saying they weren't nice to work with, they were all extremely pleasant, just the system of doing things was very inefficient. Rather than emailing me so many different forms and PDF instructions they could have linked to them on the FAB control panel. It's the CEOs job of ensuring the systems a business uses are efficient and it seems that's what destroyed them. Wasting money.

arbuge 12y ago
When did you do business with them? Early days or more recently? Curious because that seems at odds with the experience of at least 1 other vendor posting in these comments...
hagbardgroup 12y ago
This reflects what I have read elsewhere. What they would do is bid wastefully using weak creative and little targeting as if they were actively trying to waste as much money as possible (which may have been what they were doing).

iamleppert 12y ago

Enough moves like this and nobody is going to want to work for this company. Enough moves like this and the CEO (Jason), a huge pre-madonna and drama queen, is going to have a tough time getting money from investors for his next "venture". Kudos for him for trying, but he certainly strikes me as a CEO I wouldn't want to work for.

md224 12y ago
Just a quick note -- and don't feel bad, this is a common mistake -- the phrase is actually "prima donna", not "pre-madonna".
- ultimatedelman 12y ago
  gentlest grammar correction i have ever seen on the internet. bravo!
- twic 12y ago
  Perhaps he really was comparing Mr Goldberg to a young Mary of Nazareth? I confess that the point of such an analogy eludes me. Something to do with carpentry?
  - md224 12y ago
    Not sure if you're just being snarky, but I would assume people who write "pre-Madonna" are under the impression it's a reference to the pop star (which sort of makes sense).
    - mrev19 12y ago
      how language evolves
    - ForHackernews 12y ago
      It's an excellent eggcorn, at any rate: https://en.wikipedia.org/wiki/Eggcorn https://en.wikipedia.org/wiki/Eggcorn
- 12y ago

abraham_s 12y ago

The CEO was in news for being mad at someone who didn't switch seats with him on a plane. http://www.businessinsider.com/fabcom-founder-baffled-by-passenger-who-declined-100-to-switch-seats-with-him-on-plane-2013-7 http://www.businessinsider.com/fabcom-founder-baffled-by-pas...

amac 12y ago

The private label strategy, though appearing as a last resort, does make some sense i.e gross margins improvement. I think this serves as a lesson to those folks operating with primarily or even just operating partly in ecommerce. That is, if you're selling other people's stuff it's an efficiency play whilst if you're selling your own stuff, you've got more room to maneuver with margin.