Earlier today, Rent the Runway CEO and Co-Founder Jenn Hyman sent the following letter to employees:
Dear Team,
Today, I am reaching out with the sad news that we are further reducing the size of the RTR workforce. Rent the Runway’s mission has always been about empowering people to feel their best everyday, which makes today’s news even more painful. I wanted to take this opportunity to share the details of what is happening, how we arrived at this decision, and what we are doing for our impacted colleagues.
What is Happening: We have decided that 26 salaried employees on our Corporate and Operations teams will not be coming back from furlough. This equates to a 5% reduction of our pre-COVID salaried workforce, on top of the 10% reduction that occurred in March. In addition, 313 of our hourly Operations employees will be temporarily laid off and 150 will have their furloughs extended. We hope to bring all of our hourly Operations employees back to RTR as demand ramps up in the coming months.
- If you are a Corporate or Operations salaried employee who is being laid off:
- You have already received an invitation for a 1×1 with your manager where we will explain in further depth the rationale behind this decision
- The details of your severance package
- How RTR can support you in finding new opportunities both now and in the future
- For the rest of our Corporate or Operations salaried employees who are currently on furlough, you will receive an email shortly confirming your return date to RTR.
- If you are an hourly Operations employee, you will be communicated to in-person at our DFC or will be contacted by telephone on an individual basis, with follow up via email and mail over the next two days. We will also discuss how to support you in finding new opportunities.
Our Decision Process: We are collectively experiencing one of the most traumatic public health and economic crises of our lifetimes. As COVID-19 began to unfold in March and the severity of the impact on Rent the Runway became apparent, we took action by dramatically reducing costs throughout our business and raising capital. We prioritized the most strategic and impactful workstreams throughout the company to position RTR for a strong recovery, whenever demand returned. The Leadership Team and I were also forced to make previously unthinkable people decisions with incomplete information about how much or for how long this crisis would impact our business.
When we implemented furloughs for salaried Corporate and Operations employees in March, our intention was to bring back everyone. A small number of employees were impacted by the layoffs today and the vast majority are returning from furlough by July 6th.
Now with three months of data on COVID-19’s impact and a somewhat better understanding of a slower business recovery throughout the U.S., we recognize there are additional workstreams and roles that we unfortunately need to de-prioritize in the near future.
For our hourly Operations employees, we are making staffing decisions based on demand and business needs and taking the following actions :
- Asking some employees who have been on furlough to return as planned by July
- Extending some furloughs
- Temporarily laying off some employees
We continue to expect that we will need all impacted hourly Operations employees back as demand ramps up, however it will be over a longer time period than we originally anticipated. The hourly Operations employees who are being temporarily laid off will receive a separation payment, vacation payout, and an opportunity to return as demand increases.
For our CX Associates who are currently on furlough, we anticipate having them return in August as planned.
The individuals impacted today are unbelievably talented and this is not their fault. We are so appreciative of their hard work and contributions over the years, and feel extremely fortunate to have collaborated with them at RTR.
What will happen next: We are devastated to say goodbye, and want to help our teammates during this challenging time. Here are several actions we are taking to assist our impacted teammates:
- For salaried employees, we are continuing benefits coverage for two months, and providing tenure-based severance packages.
- For hourly Operations employees, we are providing a $1,000 cash payment that can be used flexibly.
- We are launching an opt-in RTR Talent Directory to circulate externally to assist with placement into best-in-class companies and positions.
- We will provide the contact information necessary for our Ops talent to connect directly with the recruiting teams at Amazon, Walmart and other local employers who are currently in hiring mode. This is an interim placement solution since we hope to keep in touch and ultimately hire them back as soon as possible.
- Employees with equity will be given an additional 3 months to exercise their stock options for a 6 months total exercise period.
Final Words:
This crisis has illuminated what truly matters. I could not be more grateful for this team and how far we have come together in the face of this unimaginable adversity. Thank you to everyone who has supported Rent the Runway and made this company what it is today. None of this would be possible without all of you.
We started a movement based on the belief that getting dressed should be smarter, more sustainable, and more affordable. One thing is certain: women are going to get dressed again, and we will be ready to meet her when she is.
To those leaving RTR, we are the lucky ones to have worked with and learned from you. Your impact, talent and passion will not be forgotten. I am truly sorry. Thank you from the bottom of my heart for everything you brought to Rent the Runway. You helped build this company, and for that we are forever grateful.
With deep appreciation,
Jenn