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- Loot Crate, a subscription service for gamers and pop culture fans, announced its intent to lay off 150 employees with "closure permanent," according to a filing with California state authorities.
- The company tells Business Insider that the layoffs are the result of a move away from operating its own warehouses, and towards using a third-party logistics provider.
- This appears to be the Los Angeles based firm’s second round of major layoffs — the first of which occurred in 2017, not long after the company was lauded as America’s fastest-growing company.
- Visit Business Insider’s homepage for more stories.
Loot Crate, a consumer startup that’s described itself as "Comic Con in a box," is laying off 150 employees, according to a public filing with California state authorities released this week.
The company, which sells monthly subscription boxes for "geek" culture, listed the reason for the layoffs as due to the "closure permanent" of a location in Vernon, California. As of Wednesday, 192 LinkedIn users listed Loot Crate as their employer, so these layoffs would seem to affect a majority of its staff.
However, in a statement to Business Insider, Loot Crate says that the company is alive and kicking — but that it’s closing its in-house warehouse operations and moving to a third-party logistics provider, and that the layoffs were "predominantly our on-call shipping and receiving staff."
Here’s Loot Crate’s statement:
"This isn’t closure for Loot Crate’s business, and instead is the company transitioning out of our current warehouse operations to a third party logistics company. The employees affected were predominantly our on-call shipping and receiving staff, who were notified earlier this year when the transition process began. Today is simply the final day of our warehouse operations, and we have begun full-time packing, shipping, and receiving for our products through the third party logistics company."
Part of the themed subscription box boom that produced jewelry-focused RocksBox, makeup-themed Birchbox, and clothing-centric StitchFix, Loot Crate was founded to cater to fans of geek culture, with boxes including swag from movies and TV shows like "Game of Thrones," "Star Trek," and "Star Wars."
In 2016, Loot Crate raised $18.5 million from Upfront Ventures, Time Inc., Sterling.VC, M13, Downey Ventures, and Breakwater Investment Management, according to Crunchbase.
At its height, Loot Crate was considered one of the fastest growing subscription-based startups, with 650,000 subscribers paying $20 per month for apparel and collectibles, according to a Los Angeles Times report. In 2016, Inc. named it the fastest-growing company in America.
This appears to be the second major round of layoffs at Loot Crate since it was founded in 2012. In an interview with the Los Angeles Times in 2017, Loot Crate founder and CEO Chris Davis said that he made a fatal error in growing the business too much, too quickly, following a round of layoffs earlier that year the cut 60 employees.
"We bit off a lot and everyone felt that," Davis told the Los Angeles Times in 2017. "Trying to get all these different perspectives, skill sets and levels of experience to work together was probably harder than I expected it to be."
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Source: Business Insider – mhernbroth@businessinsider.com (Megan Hernbroth)