If you ask employees when they started to notice that something was wrong at Fab, they will usually mention the bike locks. The bright orange locks appeared suddenly, affixed to the office doors of senior executives. “This was a company that prided itself on openness,” says one former staffer. “You could go in and talk with the founders about anything. And then suddenly it felt like they didn’t even trust us not to steal off their desks.”

Over the last two and a half years, Fab, an e-commerce site centered around design, has been on a tear. It grew from nothing to a company with 14 million members and more than $115 million in annual revenue by 2012. It expanded sales to 26 countries worldwide and raised more than $325 million in total venture-capital funding, investments which valued the company at more than $1 billion. And then suddenly, in the last six months, it seemed like things were unraveling just as fast.

It started in June, when Fab laid off 150 employees from its European workforce. In October it let go more than 100 employees in New York. Then at the start of November, co-founder Bradford Shellhammer announced he was leaving the company. He was part of an exodus that included the chief marketing officer, chief operating officer, and directors of communications, business development, and buying. A third round of layoffs followed, cutting more than 50 employees in New York.

“These days things are pretty quiet around the office,” says a current staffer. “People just keep their heads down. Everyone is busy working on their résumés. It’s depressing.”

How did Fab get here? And can it find a way to get its mojo back? The answer seems to lie with one man, co-founder and CEO Jason Goldberg. According to insiders, he has the backing of the board and just completed a “re-founding” of the company that elevated several junior staffers into the hollowed-out executive ranks. Fab reportedly has around $120 million in the bank, money which should last it through 2015.

But current and former employees agree that unless Goldberg can find a way to restore the company’s shattered morale and recapture the quirky spirit that powered its early sales growth, Fab may never find a way to recover. When it comes to suddenly ailing startups, Goldberg has prior experience to draw on. This isn’t the first time a high-flying company he founded has suddenly hit the skids. “If you want to understand why Fab went through all these crazy changes and painful layoffs, it’s pretty simple,” says one Fab executive. “Take a look at Jobster. Because Jason has done this before. This exact same thing.”