Victoria’s Secret (VS&Co.) and Gopuff have become the latest retailers to make significant cuts to their workforce. VS&Co. is laying off about 5% of its home management staff, consisting of about 160 roles, as part of a wider reorganization effort that will unite the Victoria’s Secret, PINK and Beauty operations under one business structure. Gopuff is reportedly laying off 10% of its employees, or about 1,500 workers, due to the uncertain economy as it pursues profitability, according to Bloomberg.
VS&Co.’s simplification also will include reinvestment in non-leadership roles focused on executing the company’s strategic initiatives. The net impact of these decisions will result in an estimated $40 million cost reduction in the run rate of the business on an annualized basis beginning in Q3 2022.
VS&Co. also has appointed three executives to lead the combined business, all reporting directly to CEO Martin Waters:
- Amy Hauk has been named CEO for Victoria’s Secret and PINK. She has been CEO of PINK since 2018 and previously spent a decade at Bath and Body Works. Hauk will lead Victoria’s Secret as it integrates the merchandising, planning, marketing and creative teams to speed the company’s test and learn agenda and better engage customers.
- Christine Rupp has been named Chief Customer Officer. She will be responsible for creating a seamless store and digital commerce business globally and will be accountable for sales and profitability across both channels. Rupp has 30 years of experience in retail, most recently at Albertsons where she served as Chief Customer and Digital Officer. Rupp also worked at Microsoft and Amazon, where she led Fulfillment by Amazon and launched Prime Day.
- Greg Unis has been named Chief Growth Officer. He successfully led the Victoria’s Secret and PINK Beauty businesses since 2016, and in this new role will be responsible for the VS&Co-Lab platform, new business development and international expansion, as well as mergers and acquisition opportunities. Greg will continue to lead VS&Co’s real estate and store design and construction teams focused on expanding the company’s store of the future initiative.
“Uniting our brands as a single, collaborative organization under Amy’s leadership will bring greater focus and discipline to our merchandising expertise while streamlining our processes and improving our speed to market,” said Martin in a statement. “I firmly believe combining our store and digital channels under Chris will move us from being a company of ‘shop keepers’ to being a company of ‘customer keepers’. By strengthening our core businesses in this manner, we are freeing up time and resources to focus on growth under Greg’s leadership.”
Gopuff Seeks Profitability Through Streamlining
Gopuff’s job cuts will reportedly affect a mix of both corporate and warehouse employees, according to a memo to investors seen by Bloomberg. The on-demand convenience retailer also plans to shutter 76 warehouses, or 12% of its network, to consolidate its footprint in some cities.
Both cuts are in line with Gopuff’s plan to reduce spending, close lower-performing warehouses and focus on higher-margin revenue streams like advertising to become profitable by 2024. Gopuff expects its latest reductions in overhead to save about $100 million annually for five years.
“These shifts are not only accelerating our timeline to profitability, they are taking us back to our roots of keeping profitability at the core of every decision,” said Yakir Gola and Rafael Ilishayev, Co-CEOs at Gopuff in a letter seen by Bloomberg.
Gopuff previously cut 3% of its workforce in March as it streamlined operations and shelved plans for a potential IPO. Investor interest in tech overall has been faltering even as competition in the rapid delivery space has exploded over the past year with established companies like Grubhub becoming involved while smaller players like JOKR scale back operations. Even brick-and-mortar retailers like Albertsons and 7-Eleven have found partners to help them offer quick delivery turnarounds, making it ever more important for pure-play delivery companies to find alternate ways of differentiating their offerings.
“At the end of the day though, for us, fast delivery is table stakes,” said Michael LaVitola, Co-Founder and CEO of Foxtrot in an interview with Retail TouchPoints. “What really matters, and what drives us, is an obsession around merchandising, and finding the best products for our customers.”
Gopuff’s secret to success may be its devotion to profitability even in uncertain times. The retailer is focusing on advancing its footprint in a sustainable fashion that can withstand any challenges ahead.
“Unlike others in the industry, Gopuff enters this period of increased volatility from a position of strength,” said Gola and Ilishayev in a memo to investors. “Gopuff is the only company in this space that has proven it can be profitable at a city and regional level. We built this company focusing on profitability first and were profitable for the first three years. This was only possible because we operated with a ‘nail it before scaling’ approach, a cultural discipline that positioned us for long-term success and sustainability.”
The impact of the difficult economic climate isn’t confined to rapid-delivery retailers — tech-focused merchants are feeling the crunch across the industry. For instance, shoe reseller StockX reportedly laid off 8% of its workforce due to the impact of “macroeconomic challenges” on its business, according to The Detroit News.