Companies don't usually go from winning an office culture award to mass layoffs in just four months--but that's exactly what happened last week at Santa Monica, California-based Fair.com.
The three-year-old flexible car ownership startup reportedly laid off 40 percent of its workforce last Thursday as part of a cost-cutting organizational restructuring. The news follows Fair's placement on Inc.'s 2019 Best Workplaces list in June, an achievement based largely on employee happiness surveys and job perks, which the company summed up to Inc. at the time:
Our company-sponsored "blind foursome" lunches break down the walls between departments, and monthly all-hands Fair family lunches are an opportunity to celebrate accomplishments. We also offer perks like free snacks and meals, flexible schedules, unlimited PTO, a complete lack of a dress code, and beer and kombucha on tap. The occasional impromptu volleyball game on the beach doesn't hurt either.
Co-founder and CEO Scott Painter told TechCrunch last week that the layoffs were proactive, aimed at encouraging profitability rather than growth alone. Notably, they reportedly included Painter's brother, CFO Tyler Painter. It's unclear how many other employees were affected, though TechCrunch noted that the company had 539 employees listed on LinkedIn last Thursday. By Wednesday, that number was down to 490.
It's unclear whether the company will continue to offer the job perks that helped it land recognition as one of 2019's top U.S. workplaces. "I expect everyone to have questions about what this means for them and the health of Fair, and while I can't promise to have all the answers, I commit to keeping you informed along the way," Scott Painter wrote in an all-staff memo obtained by TechCrunch. (Fair did not respond to Inc. requests for comment Wednesday.)
Fair is backed by roughly $385 million from Japanese investment firm SoftBank. A number of other SoftBank-backed companies are currently struggling or facing public scrutiny over unprofitable business models, including WeWork, which had to shelve its IPO, and Uber, which has seen its stock price fall since going public. A Bloomberg report on Tuesday also noted that dog walking startup Wag is looking to sell after losing significant market share to its rival, Rover.com.
Update: On Wednesday, the Wall Street Journal reported that Painter is stepping down as Fair's CEO, and that SoftBank operating partner Adam Hieber will take over as interim CEO. The Journal noted that Painter will remain chairman of Fair's board of directors.