More Layoffs at StockX – Should Sellers Worry?
Is StockX in trouble? The emerging Detroit-based online marketplace, known for being a destination for sneakerheads, announced another round of layoffs this week.
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This is the second significant news of layoffs at the company this year, citing “macroeconomic” challenges again. This one is resulting in nearly 80 employees with corporate roles having to seek other jobs.
“Our business is multifaceted and continues to evolve, as does today’s market,” the company said in a statement Thursday.
“We actively manage our business and regularly evaluate our strategic priorities to set StockX up for long-term success.”
“We made adjustments to some of our corporate teams today to align with our current organizational priorities.”
“While macroeconomic trends require businesses to be nimble, our vision of being the trusted global platform for consuming and trading current culture is as certain as ever. We thank the many team members who have contributed to this effort.”
In June, StockX laid off about 8% of its workforce from an estimated 1,500 employees globally as cited on its website. With this second round, the company’s total headcount has shrunk by around 200 folks this year.
Should StockX Sellers Worry?
So does this mean StockX is in trouble? That is hard to tell as economic realities are catching up with other tech and eCommerce companies as well and the company is not required to disclose financials publically.
For example, this week Amazon announced a corporate hiring freeze to at least last until the end of this year.
“We’re facing an unusual macroeconomic environment, and want to balance our hiring and investments with being thoughtful about this economy,” said Beth Galetti, senior vice president of people experience and technology at Amazon in a memo to employees this week.
Unlike Amazon, eBay, or Etsy, which are public companies and have to report financial information publically to investors, StockX is a privately held enterprise founded in 2015.
Since its inception, the company has raised $690 million in funding to build and expand its online business. Like many such startups, StockX is probably still bleeding money as it continues to build its business.
The fact StockX acknowledged these two rounds of layoffs suggests management is trying to rightsize the company’s finances. This could also be tied to its rumored IPO potentially being delayed as the IPO market has cooled off this year.
StockX is facing headwinds from two other areas that may be impacting its overall business.
eBay has been pushing hard into its core sneakers business with apparent success, probably affecting StockX’s growth, if not overall sales.
And Nike filed lawsuits against StockX claiming trademark infringement in NFTs (Non-Fungible Tokens) the marketplace sold and that counterfeit Nike shoes were sold on StockX, despite claiming an authenticity guarantee.
All of this sounds a bit gloomy, but sellers shouldn’t give up on StockX.
Last month, the company hired Paul Foley, an footwear industry veteran, as its head of brand protection to help StockX implement better counterfeit controls and verifications capabilities.
So, while two rounds of layoffs are never good news — maybe even suggest early warning signs of problems at a company — it does appear StockX is trying to rightsize the business to match the unusual macroeconomic realities today that other online businesses are facing as well.
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Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.