UPDATE: Gilt Groupe has not returned requests for clarification or comment, but responded via AllThingsD this morning.
CEO Kevin Ryan told the blog: “We are not closing down any businesses. We are not closing down Gilt Taste, and we aren’t merging Gilt City and Jetsetter.” Mr. Ryan also said, “In its fifth month of business, Park & Bond did more revenue than any other business in its fifth month,” although he did not say by what metric. He added that President John Auerbach is still employed at the company for now. But, he noted, there was a chance some of its top 15 executives may leave. (Chief Marketing Officer David Zucker left the company in July and Chief Product Officer Stefan Pepe left the company in June.)
Mr. Ryan did, however, tell AllThingsD that Gilt expects to “selectively trim” staff by about 50 over the next couple months, but claimed that by the end of March the number of employees would be larger than it is now. Gilt Groupe, he said, is on track for an IPO, possibly at the end of the fourth quarter, but mostly likely in 2013.
As for Gilt Taste, Mr. Ryan claimed that the site would need fewer staffers despite “doing great.”
Business Insider, where Mr. Ryan is chairman, has also confirmed impending layoffs of 50 to 60 people within the next week or so. According to Business Insider’s source, five to six percent of the company will let go across various departments in order to get cash-flow break-even by the second quarter of 2012.
Here is our original post:
Since Friday Betabeat has been hearing rumors about impending layoffs at Gilt Groupe. Late Tuesday night, a second source familiar with the company told us that the layoffs would happen on Wednesday and might be as high as 170 employees. We have reached out to Gilt Groupe for confirmation and will update the post as soon as we hear back.
The accounts vary, but both sources also point to restructuring within the company. One source said Gilt Taste, which hired former Gourmet editor-in-chief Ruth Reichl as editorial director last May, is expected to function at half its current workforce, with the remaining staffers funneled into other open positions in the company. Another source speculated that Gilt Taste was likely to be shut down.
Betabeat also heard that Gilt City and Jetsetter, which overlap in the high-end travel market, will merge. In October, Gilt City, which has a partnership deal with Google offers, acquired the daily deals site BuyWithMe, which itself suffered from big layoffs in the crowded deals space.
In some cases, the rumored layoffs may have already begun. A source said that a president at one of the Gilt Groupe verticals had been recently let go. Based on the description of a longtime executive who helped launch Gilt Man and other details, sources pointed to Park & Bond president John Auerbach.
Former employees say Park & Bond, which launched a partnership with GQ in August, hasn’t been moving merchandise and that, aside from Gilt Women, revenues are not what the company had hoped for in its dizzying attempt to chase growth by spinning off new verticals outside of its core business.
“We plow through 100 ideas a week,” Rob Deeming, Kevin Ryan’s chief-of-staff said in October, adding, “At any one time I’m trying to manage a list of 10 to 15 businesses we’re thinking about going into.” In November, just before announcing its expansion into 90 new countries, Gilt Groupe revealed that it was hiring a worker a day.
One explanation for operational adjustments within company might be an attempt to trim the fat before Gilt Groupe’s much-speculated-about IPO. In May, the company picked up $138 million from Goldman Sachs, Draper Fisher Jurvetson, and others, along with a rumored $1 billion valuation.
The mood among certain verticals is tense as employees worry about their future with a company. Among developers, Gilt was always known as an exacting environment. Now, a source said, “Everybody in there is looking for new jobs.” Last month, Lot18 poached Andrew Koch, formerly VP of marketing at Gilt, as its VP of product. The feeling is that layoffs “are just a question of when or where.”
We will continue to update the story as it develops, so please reach us by email with any information: email@example.com.