Adding itself to the growing list of direct-to-consumer companies announcing job cuts, online rug brand Ruggable said it laid off 100 corporate employees on Friday.
“On January 27th, we made the difficult decision to part ways with about 100 members of our global corporate team,” the company said in a statement emailed to Retail Dive. “This outcome was driven by an internal restructuring to ensure our business will remain strongly positioned in today’s challenging economic environment. We are incredibly appreciative of our team’s contributions to Ruggable.”
The e-commerce company focuses on selling machine-washable rugs that use a two-piece layer system. Ruggable has previously released collections with designers such as Jonathan Adler and Keith Haring.
Both the home goods sector of retail and those selling goods online benefited at the onset of the pandemic as more consumers stayed home and leaned on e-commerce to avoid unnecessary trips to stores. But as the economy opened back up, largely helped by the distribution of vaccines, consumer spending began to shift away from the home and to other areas like dining out and entertainment.
Retailers across the industry have turned to layoffs over the last year as a way to cut costs. Several DTC brands in particular have cut staff: Warby Parker in August announced it laid off 63 employees, representing 2% of its total workforce and 15% of its corporate workforce; Glossier that same month laid off about two dozen employees, following earlier layoffs in January impacting over 80 employees; and Allbirds in late July laid off 8% of its global corporate workforce.
The layoffs have continued into 2023: Newell Brands, Gymshark, Everlane, Wayfair and Helen of Troy last month announced they enacted layoffs as well.
The staff cuts come as investors become increasingly critical about brands reaching profitability. While “growth-at-all-cost” strategies were once encouraged by brands entering the market, it has become more difficult to raise funds without a clear path to profitability. In an internal memo sent to Everlane employees regarding its latest round of layoffs last month, the brand’s CEO, Andrea O’Donnell, said “It’s no secret that these are difficult times for venture-backed companies. The expectation to be profitable shifted overnight. ... Today’s tough decision is intended to set us up to improve profitability in 2023.”
via https://www.aiupnow.com
Dani James and Caroline Jansen, Khareem Sudlow
