In a sign of the times, direct-to-consumer startup AllBirds announced today that it is laying off 23 employees. This comes as no surprise, as direct-to-consumer (DTC) brands have been struggling lately. AllBirds is just the latest in a long line of companies to cut staff in order to stay afloat.
This comes as a direct result of the struggling industry, which has seen companies like Away Luggage and Casper struggle in 2022. DTC is great when the economy is thriving and when people are willing to spend money on luxury items. However, in a recessionary climate, people are much more likely to cut back on spending.
This is likely to impact all subscription-based businesses, not just DTC firms. With the economy in a recession and folks being forced to reassess their spending habits, many are deciding to limit non-essential items. This will put even more pressure on companies like AllBirds in the coming months.
For now, it seems that layoffs are the new normal for direct-to-consumer brands. We can only hope that the industry recovers soon so that these companies can start hiring again. Until then, we’ll be keeping a close eye on this space.
DTC companies will need alternative means of revenue if they want to survive the current economic climate. Glossier, another DTC beauty company, has been in the news recently for its decision to start selling through Sephora. This could be a sign of things to come, as DTC brands look for ways to stay afloat.
Allbirds plans to streamline workflows and reduce duplicative efforts in the wake of the layoffs. The company is also looking to put past learnings and operational insights into practice. Only time will tell if these measures are enough to help Allbirds weather the storm.
FYI, we’re a fan of Allbirds shoes, and we’ll do our part to support the company by continuing to buy their products. If you’re looking for a great pair of shoes, we highly recommend checking them out!