Gilt Groupe wants to turn a profit, and plans to lay off 45 staff members as part of a restructuring of operations to be cash flow positive.
The flash-sale site, in operation for about eight years, hasn’t yet turned a bottom-line profit, although in the past it has had a quarter here and there where it has been profitable as far as earnings before interest, taxes, depreciation and amortization, said a source familiar with the restructuring move. The individual said the changes are to ensure that it positions the company with a bottom-line profit that also generates cash flow on an ongoing basis.
To ensure Gilt meets its profitability goals, the company has made some changes to its operations. Chief marketing officer Clay Cowan will leave the company. He joined about a year ago, but under the new structure the marketing division will be divided into two groups.
One marketing team will focus on demand marketing, such as CRM and loyalty. They will report to chief information officer Steve Jacobs, who will be overseeing the function with a “tech lens,” said the individual familiar with the change.
A second marketing group will be focused on the brand side, and they will report to two vice presidents: Andrew Powell who heads up Brand & Creative and Virginia Carnesale who focuses on Integrated Marketing and Creative Production. Powell and Carnesale will report to Keith George, chief merchandising officer, in the near term.
Heading up the international business is Marshall Porter, who now will be leaving the firm. Porter spent the last several years building and launching Gilt’s international business. While international includes Gilt Japan, which is owned by Gilt, the changes won’t impact that business since it is operated separately and has its own chief executive officer.
International represents 20 percent of Gilt’s overall business, and Oksana Voronenko, who reported to Porter, will become senior director of international. She will run the business and report to Steven Schneider, who will now oversee international in addition to Gilt City and BD. Schneider reports to Tracey Weber, Gilt’s president.
Of the 45 jobs that were cut, 35 are full-time staff members from marketing, technology and general and administrative functions, which are deemed no longer necessary given the restructuring. Another group of jobs — 10 in total — were filled by temporary workers.
Jennifer Miller, senior vice president for corporate communications at Gilt, said, “While it is always difficult to lose talented people, we are confident the changes we made today position Gilt to be a profitable business in 2016.”
The layoffs were first reported on TechCrunch.