New York-based online wine marketplace Lot18 is axing one-third of its workforce – its second round of job losses in a year – as it unveils a major change in strategy.
The company, whose UK arm shut last summer after only five months in operation, has announced the loss of about 25 jobs in the US, leaving a total of 46 people in its workforce – half the level of a year ago.
Lot18, which was established in November 2010, has until now worked by signing up members for free and selling them difficult-to-find parcels of wine in ‘flash sales’ and at discounts.
But the company has already trialled a paid subscription model – similar to that used by companies such as the UK’s Direct Wines – and has promised the launch of ‘an innovative new product and model’ in the next few months.
Asked how the new Lot18 will aim to differentiate itself from rivals, such as Direct Wines and Global Wine Company, a spokesman told Decanter.com: ‘That will be apparent when the product launches. We’re unable to provide specifics just yet.’
Late last year, Lot18 trialled two subscription models: six bottles for US$99 a month, or 12 bottles for US$149 a month (following a discounted first month), and these will continue in the short term until the launch of the new product, the spokesman added.
Company CEO Jay Sung said: ‘The team we have – and many of the excellent people who left the company today – worked incredibly hard to make Lot18 strong, but we need to resource according to our new business model and operate the existing business more efficiently with considerably less burn.’
Six jobs were lost when Lot18 closed its UK operation last July, blaming the ‘stranglehold’ of supermarket chains on the wine retail sector.
Written by Richard Woodard