Birchbox Cuts More Employees
Subscription beauty service Birchbox has let go an additional 30 employees, this coming five months after the startup cut 15 percent of its staff. Birchbox Founder and CEO Katia Beauchamp announced in a blog post on Tuesday that the original cuts (50 of 300 employees) were too conservative. This week's layoffs are part of a series of measures that Birchbox is taking to scale back. The company, which was once valued at $485 million, has also halted plans for at least three more brick-and-mortar shops, as well as international expansion, after failing to raise more capital last year.
Total Retail’s Take: Birchbox has had a tough time getting its footing over the last few months. Between the layoffs in January and these most recent cuts, the company's staff is down to around 220 people. Unfortunately for Birchbox, copycats from startups such as Ispy to big-box retailers like Sephora are also trying to cash in on the beauty subscription market. This has made it much more difficult for Birchbox to stand out in the crowd. Sucharita Mulpuru, analyst at Forrester, said it best in a quote to Bloomberg, "Expectations have been too high. We've seen this story before."