Birchbox Cuts 15 Percent of Staff, Suspends Operations In Canada



Birchbox, the six-year-old beauty subscription service, just announced it’s laying off 15 percent of its staff, and suspending operations in Canada. 

The news comes just five months after the company lost its co-founder and co-CEO, Hayley Barna

“The cuts made today will allow us to reinvest in our biggest opportunities and grow even more quickly in the future,” co-founder and CEO Katia Beauchamp said in a statement on Friday. “Our vision for Birchbox has always been to build a standalone company, and today’s market demands that we reach profitability this year.”

Beauchamp did not respond to Inc.‘s request for more detailed comments. 

“We are hitting all of our growth goals and expect to nearly double our shop sales, while still experiencing significant growth in subscriptions in 2016. We will do this as a leaner, stronger and more resolved company,” she continued in the formal statement.

In an interview with Pando Daily, who first reported the news, she cited the stingy funding climate as a major reason for cutting 45 members of her staff.   

Birchbox, it’s worth noting, is playing in an especially tricky sector, where a large amount of operational capital is required to drive revenue growth. The company’s most recent funding round occurred nearly two years ago, when it secured $60 million from investors like Viking Global Capital.

“It’s easy to underestimate what we do,” Beauchamp told Pando Daily, referring to the business model. “There’s no such thing as a beauty emergency. But it is a category that elicits so much emotion.” 

Birchbox isn’t the only tech startup experiencing growing pains. In recent months, Jawbone, Hootsuite, and Evernote have announced their own layoffs, as such companies aim to position themselves for sustainability in the long-term. 

All said, venture capital investment in the U.S. is on the decline. There were 981 funding rounds in the fourth quarter of 2015, its lowest since the fourth quarter of 2011, according to data from research firm CB Insights. 



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