Zully, an online retailer, laid off its employees last week as its parent company sought to cut costs amid broader industry concerns related to the growth of e-commerce.
Less than 100 positions were affected, accounting for less than 10% of the company’s total employees. Qurate Retail Group acquired Seattle based Zully in 2015. A spokesman for qurate retail group confirmed the layoffs, but did not provide specific figures of the jobs affected.
“Last week, we announced to our team members some difficult choices we have made for the company to align our operating expenses with our revenue and position our business for future growth,” the spokesman said in a statement.
According to LinkedIn, Zully employs more than 900 people in Seattle.
Qurate reported earlier this month that Zully’s first quarter revenue fell 38% to $232 million. The operating loss increased to $38 million from $18 million in the same period last year.
Qurate said in its revenue report: “Zully’s revenue decline is mainly due to supply chain constraints and inefficient marketing. This is mainly due to the cost inflation and privacy changes of some social media platforms, which lead to Zully’s reduction of marketing expenditure and affect its customer acquisition and retention.”.
Zully also incurred $2 million in restructuring costs this quarter, mainly related to its “regional office space strategy” and the closure of a factory in Pennsylvania later this year, which will lead to 504 layoffs.
Due to the $363 million “non cash impairment charges related to its trade name and goodwill”, the company also suffered an operating loss of $396 million in the fourth quarter. We have followed up with Zully to understand the details of the allegations.
Other e-commerce companies, including Amazon, experienced a two-year surge in online shopping during the epidemic. Inflation and supply chain problems are also affecting online retailers. UPS predicted last month that e-commerce delivery growth would slow.
In March, zulli hired Terry Boyle, a former Nordstrom executive, as president and CEO. Boyle succeeded Jeff yurcin, a former Amazon executive and CEO of shoppop, who took over as long-term CEO and co-founder Darrell cavens in May 2018.
Zully was listed in 2013 and acquired by qurate for $2.4 billion in August 2015.