New York-based beauty subscription service Birchbox has confirmed to FashionNetwork.com that it plans to eliminate 25% of its worldwide employees as it seeks to streamline and consolidate its global operations.
In a statement, Birchbox cofounder and CEO Katia Beauchamp explained that the company is in the process of “creating more synergy across markets and consolidating globally.”
The job cuts are being made to reduce redundancies in the U.S., UK and Spain, and will involve the relocation of some of the company’s UK operations to its Barcelona office, which will take over management of the British market.
Beauchamp went on to highlight changes made in Birchbox’s subscriber model in 2019. Notably, the company introduced tiered pricing in order to encourage longer-term commitments and increase the value of each subscriber, thereby improving the business’ unit economics.
According to the executive, as a result of this initiative, the company’s subscriber base has reduced but individual subscriber value has increased.
Churn has also decreased to record low levels, with the company increasing its margin on monthly subscriptions and seeing a 4x rise in customers committing to 12-month subscriptions.
“Building on that progress, we believe creating more savings through these operating efficiencies is the best path forward for the company,” concluded Beauchamp.
Founded by Beauchamp and Hayley Barna in 2010, Birchbox was a pioneer in the subscription box boom.
In January the company sold its French subsidiary to Quentin Reygrobellet and Martin Balas, Birchbox France CEO and COO, respectively, and French investment fund Otium Capital.