In April 2020, Casper, a direct-to-consumer mattress startup, laid off 78 corporate employees, accounting for 21% of its total corporate workforce, and began winding down its European operations. This decision came amid the COVID-19 crisis and the company's focus on achieving profitability by mid-2021. In this article, we'll discuss what happened, why it happened, and the potential future impact of these layoffs.
The layoffs at Casper were driven by economic pressures and the company's focus on achieving profitability amid the COVID-19 crisis. The pandemic negatively affected the company since its lackluster IPO and troubled public market debut in February 2020. Casper decided to wind down its European operations and concentrate on the strength of its North American business, resulting in more than $10 million in annualized savings. Impacted employees in both North America and Europe received severance packages and extended medical coverage.
To support laid-off employees, Casper provided career coaching and new job placement assistance. These layoffs are part of a broader trend of fast-growing direct-to-consumer companies, such as Everlane, Away, and Thirdlove, facing economic challenges and making difficult decisions to stay afloat during the pandemic.
Following the layoffs, Casper expects to save more than $10 million annually, which could improve the company's financial health in the long run. The strategic adjustments made by Casper include winding down European operations and concentrating on the strength of the North American business. This decision to focus on the North American market and cut costs through layoffs aims to help Casper achieve profitability by mid-2021 and position itself for future success.
The impact of Casper's layoffs on the retail industry may signal a shift in focus for direct-to-consumer companies, as they reevaluate their global presence and prioritize profitability. Casper's decision to wind down European operations and concentrate on the North American market highlights the challenges faced by the retail industry in maintaining profitability across different regions.
The layoffs at Casper are part of a larger trend of tech unicorns experiencing layoffs due to the economic downturn caused by the COVID-19 pandemic. This could lead to a more cautious approach to expansion and a greater emphasis on cost-cutting measures within the industry.
Casper's layoffs, driven by economic pressures and a focus on profitability, resulted in a 21% reduction in corporate workforce and winding down European operations. These actions, expected to save over $10 million annually, reflect a shift in direct-to-consumer companies prioritizing profitability and reevaluating global presence. Casper's future may involve a more cautious approach to expansion and increased emphasis on cost-cutting measures, potentially influencing the broader retail industry's strategies.
