Zulily employees received notice last week that they’d lose their jobs in February. But many of them were surprised Wednesday to get an email notifying them that today would be their last at the company.
“Last week’s [decision] was already shocking. Today’s is just infuriating,” said Benjamin Normoyle, a longtime engineer at the company who received the message, speaking with GeekWire on Wednesday.
Other affected employees posted on LinkedIn to say it was their last day.
Employees were locked out of their email and other company resources shortly after receiving the layoff notice.
GeekWire first reported last week that the online retailer planned to shut down three offices, including its Seattle headquarters, and lay off more than 800 people in total. The company, owned by private equity firm Regent, announced a “going-out-of-business” sale last weekend.
It’s not yet clear how many employees had their termination dates moved up to today. One person who spoke with us on Wednesday was still employed there.
Zulily submitted filings with state employment officials in Washington, Nevada, and Ohio last week, stating that layoffs would begin Feb. 7.
“We regret to inform you that based on based on business circumstances we must move your Termination Date up,” reads the email Wednesday to affected employees, obtained independently by GeekWire.
Zulily’s health insurance plans will cease effective Dec. 31 for these employees, according to the memo. There is no mention of severance.
“As you know, on December 7, 2023, we gave you notice informing you that your employment relationship with Zulily would end on February 7, 2024, or the 14-day period commencing on that date,” it reads. “We gave this notice voluntarily under the Worker Adjustment and Retraining Notification (WARN) Act even though you were not entitled to WARN notice because you are not employed at an affected site of employment as defined by the WARN Act.”
The Worker Adjustment and Retraining Notification (WARN) Act, a federal law passed in 1988, aims to protect workers by typically requiring either a written warning at least 60 days before a layoff or closure, or 60 days of severance if advanced notice is not provided, for companies with 100 or more full-time employees.
It’s not clear how Zulily is determining what qualifies as “an affected site of employment,” as stated in its email to employees Wednesday.
A notice from Zulily last week to the Washington state WARN system said 292 employees in Seattle were to be laid off as part of a closure. Separate state filings showed that the Ohio facility closure impacts 274 employees, and the Nevada facility closure impacts 273 employees.
The WARN rules include exemptions to the notification and severance requirements “when employers can show that layoffs or worksite closings occur due to faltering companies, unforeseen business circumstances, and natural disasters,” according to the U.S. Department of Labor.
A “faltering company” can be eligible for a reduced period of notification, according to the WARN Act, if an employer has been “actively seeking capital or business at the time that 60-day notice would have been required.” That includes seeking financing or refinancing via loans, issuing stocks or bonds, or pursuing other sources of money or credit.
However, the act notes that this exemption “should be narrowly construed” and does not apply to mass layoffs, but only to a “plant” that is closing.
Legal experts say the shift to remote work has created a gray area for how the WARN Act applies to companies with employees who work from home.
The email to employees on Wednesday, about the accelerated termination timeline, notes that they will receive details about COBRA health insurance and required state notices separately.
“We thank you for your service to Zulily,” it concludes, “and wish you well in your future endeavors.”
We’ve contacted Regent for comment on the latest notices. The firm has not responded to multiple emails from GeekWire about developments at Zulily over the past several months.
Here is the full text of the message.
Subject: Employment Update
December 13, 2023
Dear ****,
As you know, on December 7, 2023, we gave you notice informing you that your employment relationship with Zulily would end on February 7, 2024, or the 14-day period commencing on that date. We gave this notice voluntarily under the Worker Adjustment and Retraining Notification (WARN) Act even though you were not entitled to WARN notice because you are not employed at an affected site of employment as defined by the WARN Act.
We regret to inform you that based on business circumstances we must move your Termination Date up. This letter replaces and supersedes the December 7 notice, and serves as notice that your employment relationship with Zulily will end on December 13, 2023 (the “Termination Date”). You will receive your final paycheck, which includes any wages due through your Termination Date, in accordance with Zulily’s regular payroll practices, and/or state law.
If you participate in the Zulily’s group health insurance plans, your coverage under those plans will cease effective December 31, 2023, unless further extended under the Consolidated Omnibus Budget Reconciliation Act (COBRA). Information about the availability of continued coverage under COBRA will be sent to you separately. Any other employment benefits in which you participate will cease on your Termination Date.
You will receive separation information, including required notices by state, to your personal email by end of day today. If you don’t see it in your inbox, please reach out to humanresources@zulily.com.
We thank you for your service to Zulily, and wish you well in your future endeavors.
Sincerely,
Richard Ormand
Manager and Chief Restructuring Officer
This is the latest chapter in a stunning downfall for what was once a cornerstone of Seattle’s tech ecosystem. Zulily launched in 2009 and grew rapidly as it gained traction by offering daily deals on products for moms and kids. It went public in 2013 and was valued at more than $7 billion a year later.
In the ensuing years, Zulily struggled to maintain its growth. Qurate, the parent company of QVC, previously known as Liberty Interactive, acquired the retailer in 2014 for $2.4 billion.
In May of this year, Qurate sold Zulily to Regent, the Los Angeles-based private equity firm. The company reported a 17% drop in revenue during the first quarter of this year, to $192 million, and a $43 million operating loss.
Regent has acquired more than 30 businesses since 2015, including consumer retail and apparel brands.
Following the acquisition by Regent, Zulily went through two rounds of layoffs. The company did not provide severance for employees who were let go in June, according to affected workers.
Zulily also moved into a smaller headquarters building following Regent’s purchase, leaving its office near the Seattle waterfront. GeekWire visited the new office in October. The space had office furniture and desks, but there were only a handful of employees.
Meanwhile, vendors who sell to Zulily started reporting unpaid invoices this year after the company was acquired by Regent.
GeekWire reported last week on two lawsuits filed against Zulily by a logistics company and a software development consultancy in recent months, both alleging unpaid invoices.
Zulily this week filed suit against Amazon, alleging that the e-commerce giant’s tactics made it impossible to compete on price without jeopardizing its relationships with key suppliers. Regent is not mentioned in the lawsuit.
