With rumors circulating of impending layoffs this morning, Business Insider confirms that 5 to 6 percent of the Gilt Groupe's workforce is going to be let go. That, according to Betabeat's initial reporting, is 170 employees throughout the company. Sure, the "flash sale" web emporium is trying to "trim the fat," as Betabeat puts it, ahead of its big IPO this year. But from Business Insider's report, it makes it sound like Gilt Groupe is rewarding the employees it hired to grow out its patchwork of high-end retail sites, like Park & Bond (started this year) and Jetsetter (2009), by laying them off. Which, of course, doesn't make us want to buy a $170 tote bag all that much (especially since Gilt's panic-y "flash" deals often aren't even that good).
The move is the result of a new focus on efficiency and profitability. Previously, the company has emphasized growth--a strategy that allowed it to amass $500+ million in revenue and a $1+ billion valuation in only a few years.
Our source explained that it takes more people to set up new departments than it does to keep them running. Now that Gilt has established a number of businesses, like Park & Bond and Gilt Man, the hard work is complete.
This article is from the archive of our partner The Wire.