Rent the Runway facing cuts from coronavirus - Business Insider

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Rent the Runway has long been heralded as one of Silicon Valley's hottest startups. Its future is now in question as coronavirus ravages retail.

It was mid March and businesses were just starting to feel the impact of coronavirus — and even highflying startups weren't immune.

During a virtual company-wide meeting, Rent the Runway co-founder and CEO Jenn Hyman told staff that the clothing rental company would freeze hiring for the rest of 2020, cut its marketing budget, and that the leadership team would all take pay cuts. Just a few days later on March 27, employees received an emotional video message from Hyman in their inboxes and were instructed to join Zoom calls where various department leads told members of their teams that they would either be laid off, furloughed, or receive a pay cut, according to three former employees with direct knowledge of the event.

Billion dollar clothing rental startup Rent the Runway pioneered the concept of women borrowing high-end designer clothes without shouldering the financial burden of purchasing them, and has long been heralded as one of the hottest tech startups. But as consumer behavior shifts in the wake of social distancing and mandatory work-from-home policies, the company furloughed roughly 35% of its corporate employees and cut overall headcount as a result of the fallout from the coronavirus — and its ability to expand its retail footprint, grow its business, and go public is now in question.

 

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