Birchbox is laying off 25% of its staff globally, according to a statement from CEO and co-founder Katia Beauchamp that was emailed to Retail Dive.
That includes nearly half of the employees at the company's New York corporate offices, according to a WARN notice filed with the Department of Labor in New York, where the company is cutting 44 employees from a total workforce of 94.
According to the company's statement, the layoffs were made to "reduce redundancies across the US, UK and Spain," and include plans to move some U.K. operations to Spain.
It's been a bad week for DTC brands. Casper slashed its IPO price on Wednesday before finally going public at $12 per share, far below the $17 to $19 range the mattress company had first envisioned. And now, after selling off its French business last month, Birchbox is laying off a quarter of its global staff to help cut costs.
This isn't the first time the subscription-based beauty retailer trimmed its staff. In 2016, Birchbox underwent two rounds of layoffs affecting 80 people total, and exited its Canadian operations. This came just weeks after the company was reportedly eyeing an IPO, though in 2018 it was acquired by hedge fund Viking Global Investors.
Birchbox is focused on the casual beauty consumer rather than super users in the category. As a result, it can be difficult to find a customer "that's not looking for you," Beauchamp told Retail Dive in July.
Speedbumps have also come up in the brand's pricing model. In March of last year, Birchbox raised prices for the first time, taking the cost of a box above $10 by introducing a tiered pricing structure beginning at $12 per month.
"[O]ur $10 price point was holding us back," Beauchamp wrote in a blog post at the time. "We've been limited in what we could offer you because — frankly — our cost of doing business has increased."
Beauchamp called out the tiered pricing structure as a step toward a better business in her statement on the layoffs, saying it "incentivized longer-term commitments." However, the business also has a smaller subscriber base thanks to the cost increases.
"[W]e doubled individual subscriber value, decreased churn to record-low levels, increased margin on our monthly subscription, and saw a 4x increase in customers signing up for 12-month subscriptions," Beauchamp said, adding that the layoffs will create additional savings and operating efficiencies for the company going forward.
Blips on the radar of otherwise much-hyped DTC brands have become more frequent as they reach maturity. Walmart-owned Bonobos laid off a number of employees in October, around the same time that the retail giant sold off ModCloth, and Wayfair and Chewy have both suffered from huge net losses in recent quarters.
Beauchamp was careful to highlight improvements at the business in her statement, saying the company has "significantly improved the fundamentals of our business, increasing the value of every subscriber and meaningfully improving the unit economics of the business." But at the end of the day, cutting a quarter of any brand's global staff gives rise to concern.